While Australian financial regulations do not regulate foreign investment, they do regulate activities in the country. APRA is the prudential regulator for the Australian financial services industry. It is a member of the Council of Financial Regulators, or CFR, which is the coordinating body of Australia’s main financial regulatory agencies, including the RBA as Chair. The objective of the CFR is to promote the stability of the national financial system by providing advice to the Federal Government.
The act empowers APRA to regulate the banking industry. It balances financial safety with competition, contestability, and competitive neutrality. The act also specifies requirements for ADIs. Those entities that engage in ‘banking business’ are required to obtain a license and comply with its strict requirements. In addition, new entities are subject to a framework known as Restricted ADI, which allows them to conduct a limited range of business activities in the first two years of their existence.
APRA is tasked with facilitating the collection of data and statistical information regarding financial services in Australia. The act specifies that a registrable corporation must be under $50 million in aggregate value and that entities must be governed by a code of conduct. Under FSCODA, entities that fall within the registrable corporation requirement must also meet certain obligations. These include providing information and communicating with stakeholders. Besides the Act, APRA must approve the activities of its members to comply with the rules.
Besides ASIC, the ACCC and APRA have their own regulatory bodies. The RBA oversees the banking sector as the prudential regulator. APRA is the statutory body that licenses and supervises the financial services industry. The commission’s remit is to protect consumers and prevent unfair practices. It is responsible for ensuring that the financial system operates efficiently. There are also numerous other organizations that help ensure that the regulations are fair and efficient.
All of the Australian financial regulators are independent statutory authorities. ASIC is the primary corporate regulator, and it regulates financial services, consumer protection, and market integrity. APRA’s role is to protect the interests of depositors, policyholders, and superannuity fund members. It has also imposed strict penalties on financial institutions that fail to comply with its rules. The Royal Commission found that AMP Limited and its subsidiaries had breached the ASIC Act and the Corporations Act, and that AMP had engaged in unfair conduct.
ASIC has extensive powers to take enforcement action against financial institutions that violate its rules. APRA can impose additional conditions on a financial institution’s licence, disqualify individuals, and order a closure. In some cases, APRA has taken such measures as implementing a BPAY-compliant bank. Its role in regulating the financial services industry includes monitoring and enforcing monetary policies.
About Alex Wade
Alex Wade is a client and people focused CEO with extensive experience managing complex environments working across all facets of financial services in multiple jurisdictions and cultures. Alex Wade is outcome driven, with a proven track record for strategic transformation, scale leadership, effective communication, driving growth and accountability, building and transforming businesses as well as cultural change and crisis management. Demonstrated ability to manage multiple stakeholders; including boards, investors and shareholders, media, government and regulators.