APRA established the enforcement review on account of new regulatory responsibilities under BEAR as well as case studies that were exposed by the royal commission.
The upcoming review into APRA is to be led by deputy chair John Lonsdale alongside a panel of experts in administration of law and regulatory enforcement.
Mr Lonsdale said the review will examine the current enforcement strategy and how it interacts with APRA’s core supervisory approach.
“The review will be a forward-looking examination of APRA’s approach to the use of its enforcement powers to ensure that financial promises made by supervised institutions are met within a stable, efficient and competitive financial system,” he said.
The scope as set out by the terms of reference says the review will conduct a forward-looking examination to APRA’s approach to enforcement.
“The review will conduct a forward-looking examination of APRA’s approach to the use of enforcement to achieve its prudential objective of ensuring that financial promises made by its supervised institutions are met within a stable, efficient and competitive financial system,” it read.
Mr Lonsdale said the review was an opportunity for APRA to strengthen its supervisory role and reinforce its role in ensuring the outcomes of enforcement action.
“APRA has taken a range of supervisory actions over many years, but it is timely to examine whether APRA’s traditional approach – prioritising prevention and rectification – can be augmented by greater enforcement activity,” he said.
The review will focus on several items, including the relationship between APRA’s supervisory approach and enforcement-action, the processes behind enforcement action and whether the current and proposed legislative framework is adequate to support recommended approach.
The review will be presented to APRA members by the end of march next year before being publicly released following recommendations.
It will make recommendations on a breadth of issues APRA seeks to address, the considerations to taking enforcement action and APRA’s own internal governance, strategies and other factors relevant to the regulator’s enforcement function.
