ASIC and APRA will enter 2021 with a firm focus on supporting financial players through “the next stage of recovery” from the pandemic as new legislation mandates closer collaboration between the two regulators in the new year.
In an update released last week, the regulators said COVID-19 had “amplified the need for alignment” when it came to solving common problems in the financial system, such as the response to loan repayment deferrals facilitated by APRA and ASIC at the beginning of the crisis.
“Both agencies worked together with the banking industry on measures to help customers faced with loan repayment difficulties because of the pandemic,” a statement from ASIC and APRA said.
“APRA adjusted capital and provision requirements for loan deferrals, and worked together with ASIC to ensure that messaging to ADIs, particularly in relation to expectations, was consistent and aligned.”
The regulators said further cooperation between ASIC and APRA since a memorandum of understanding was signed between them in 2019 had led to the avoidance of “significant duplication in the investigative process” when major breaches occurred, such as investigations against Westpac this year where ASIC had taken the lead role.
The two regulators had also worked together over the course of 2020 “to ensure guidance to [super] trustees was integrated, including jointly informing all licensees on 1 April 2020 of current and new obligations prompted by the crisis,” the statement said.
Cooperation between ASIC and APRA was set to be further reinforced by legislation responding to recommendation 6.9 of the royal commission, which set out a statutory obligation to “cooperate, share information and notify each other of suspected entity breaches of laws administered by the other”, the regulators said.
“This legislation will further formalise this commitment and the progress made to date to closer collaboration and information sharing”, the update stated.
As they looked to further cooperate in 2021, ASIC and APRA said key priorities across both regulators would be embedding new reforms to super, preparation for the Financial Accountability Regime and improving performance assessment frameworks.
“More importantly, APRA and ASIC will continue to work together on supporting the financial system, businesses and consumers as they enter the next stage of recovery from the COVID-19 pandemic,” the regulators said.