APRA has restarted public consultations on selected policy reforms and phasing in the issuing of new licences, after it placed the activities on ice in response to the coronavirus pandemic.
The prudential regulator declared it would be recommencing public consults from Monday and begin a phased resumption of new licence issuing.
APRA had suspended the majority of its planned policy and supervision initiatives in March, while the issuing of new banking and superannuation licences was also suspended due to fears around the challenges new entrants would face in the economic uncertainty.
The cross-industry prudential standard for remuneration, the prudential standard for insurance and updated guidance on the sole purpose test are among the policy reforms being recommenced, alongside public consults for APRA’s Superannuation Data Transformation project.
The other policy changes being reopened are ADI capital reforms incorporating APRA’s “unquestionably strong framework”, Basel II and measures to improve transparency, comparability and flexibility, and insurance capital reforms to incorporate changes in the accounting framework.
After starting the year with an “ambitious” policy agenda, the watchdog has signalled it will review its policy program for 2021 in light of the current environment, and responding to industry capacity and government priorities.
APRA chair Wayne Byres said it was appropriate, having suspended the activities for six months, to provide affected parties with greater certainty.
“We now believe we can restart both policy consultations and licensing activity. However, it is neither possible nor desirable to pursue our full policy agenda for the time being,” Mr Byres said.
“APRA therefore intends to narrow its policy activities in the remainder of this year to a small number of high-priority prudential policy reforms.”
The pause on new policy changes had “enabled entities to allocate time and resources to manage their own operational challenges in response to the crisis, as well as supporting their customers through this period of significant economic uncertainty,” he said, as well as allowing APRA to redeploy its resources to monitoring and responding to the changing environment.
Meanwhile, assessing and issuing new banking, insurance and super licences will occur in two phases, with phase one starting in September and the second phase in March.
New licences in the first round will be issued to applicants that are branches or subsidiaries of foreign entities with “significant” financial resources and a “strong” operational track record in a similar business.
New licence applications from any entity will be accepted in the second tranche.
The regulator is also reviewing the pathways to an ADI licence, including the restricted ADI licensing framework that was launched in 2018.
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].
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