APRA sets sights on 2019 targets

APRA has outlined its policy focus for the remainder of the year following the Royal Commission.

Releasing its annual policy priorities document this week, the prudential regulator said it would build on the work it began last year, while taking into the major events swirling within the financial services industry. It specifically referenced the Royal Commission, the final report of the Productivity Commission's inquiry into superannuation and the BEAR legislation.

For the super sector, APRA has outlined three specific plans. It is headlined by a plan to ensure trustees are prepared to implement the new member outcomes assessments from July 1.

The prudential regulator also flagged its plan to complete the post-implementation review of the prudential framework introduced in response to the Stronger Super reforms of 2013. It also said it would consult on proposals to address areas where changes are needed and would update the superannuation data collection. Specifically, APRA wants to expand the information it collects on choice products.

APRA said it intended to carry out a previously announced review to its approach to enforcement, after the Royal Commission called it and ASIC out for their enforcement behaviour. The commission's final report even recommended a new regulatory overseer as a result.

APRA chair Wayne Byres said its inquiry into the Commonwealth Bank and issues at the Royal Commission had shone light on areas in need of focus.

"Financial soundness and stability remain at the core of APRA's objectives. But APRA's Prudential Inquiry into Commonwealth Bank of Australia (CBA) highlighted the importance of not just having a healthy balance sheet, but also strong governance, a sound culture, appropriate internal controls, and clear accountabilities," Byres said.

"These issues were further emphasised during the Royal Commission, where a lack of accountability often lay at the heart of misconduct and poor consumer outcomes.

"To address these issues, we will further strengthen our prudential requirements on executive remuneration, with consultation on a revised prudential standard due to start mid-year. We will also review our cross industry governance and risk management standards this year to ensure they encourage a sharper focus on non-financial risks."

Read more: APRARoyal CommissionASICCommonwealth Bank of AustraliaProductivity CommissionPrudential InquiryStronger SuperWayne Byres
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