Powered by MOMENTUM MEDIA

Regulators ease supervision, prioritise coronavirus response

— 1 minute read

The financial watchdogs have suspended a number of their planned policy and supervision initiatives in response to the impact of COVID-19.

In coordination with the Council of Financial Regulators, ASIC and APRA have indicated they would be intensifying their focus on monitoring and responding to the impact of the pandemic on regulated institutions’ financial and operational capacity.

As a result, ASIC has immediately suspended its on-site supervisory work, including the close and continuous monitoring program and where warranted, it will provide relief or waivers from regulatory requirements.

Advertisement
Advertisement

The easing up will include requirements on listed companies associated with secondary capital raisings and audits.

The corporate regulator has placed activities on hold including consultation, regulatory reports and reviews, such as the report on executive remuneration, updated internal dispute resolution guidance and a consultation paper on managed discretionary accounts.

It also indicated it will be working with financial institutions to accelerate the payment of outstanding remediation to customers.

“ASIC will maintain its enforcement activities and continue to investigate and take action where the public interest warrants us to do so against any person or entity that breaks the law,” the regulator stated.

“However, it will focus on action necessary to prevent immediate consumer harm, egregious illegal conduct and other time-critical matters.”

Key business as usual functions such as registry operation and services, receipt of whistleblower, breach and misconduct reports and general contact points for industry will be maintained.

APRA to largely suspend supervision activities

Likewise, APRA’s supervision priorities as outlined in January will be largely suspended until the end of September, particularly where they involve intensive engagement with regulated organisations.

APRA’s supervision effort will involve virtual engagements with entities unless absolutely necessary, with it planning to monitor key financial settings, such as capital and liquidity, and responding accordingly.

It is also reconsidering the implementation dates and transition timeframes for prudential and reporting standards that have been recently finalised but not yet instigated. Further details on any adjustments are said to be coming shortly.

It is also suspending all “substantive” public consultations and actions to finalise revisions to the prudential framework that are currently underway or upcoming, including consultations on prudential and reporting standards.

APRA said it will keep the situation under review, but it presently does not plan to recommence consultation on any non-essential matters before 30 September 2020.

However it may continue to progress certain data reporting initiatives where they are critical to meeting its mandate in the current environment, including new data collections related to the impacts of COVID-19.

APRA chair Wayne Byres said it was essential that both APRA and financial institutions were able to give their fullest attention to the impact of COVID-19.

“APRA set out an expansive policy and supervision agenda in January, but right now it is more important that banks, insurers and superannuation trustees – as well as APRA – devote their energy and resources to responding to the impact of COVID-19,” Mr Byres said.

“We will be working with financial institutions to balance the need for timely data and information on current conditions with institutions’ ability to effectively manage their own response.

“Given the rapidly evolving environment in which everyone is operating, we will continue to closely monitor the extent and impact of COVID-19 on APRA-regulated entities to consider if any further modifications to our supervisory and policy activities are necessary.”

APRA signalled to banks last week temporary changes to its expectations on capital ratios, to ensure they were well positioned to provide credit to the economy.

ASIC also placed a limit on trades last week requiring participants to manage transaction volumes, in an attempt to ensure the equity market remained resilient.

 

Regulators ease supervision, prioritise coronavirus response
ID logo
Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

related articles

promoted stories

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.