APRA to Recommence Prudential Policy Program and License Issuance
APRA announced its intent to recommence public consultations on select policy reforms and to begin a phased resumption of the issuance of new licenses for banking, insurance, and superannuation entities. These initiatives were suspended in March and April due to the impact of COVID-19 pandemic. One key policy reform that will be recommenced in 2020 through the process of public consultation involves the capital reforms for banks, incorporating APRA’s unquestionably strong framework, Basel III, and measures to improve transparency, comparability, and flexibility. Additional reforms that are to be recommenced are the insurance capital reforms to incorporate changes in the accounting framework (AASB 17), the cross-industry prudential standard for remuneration, the prudential standard for insurance in superannuation, and the updated guidance on the sole purpose test.
Aligned with its policy agenda, APRA will also restart consultation on a limited number of its data collections, including the recommencement of its superannuation data Transformation project. The policy program for 2021 will be reviewed in light of the current environment and with a view to continuing to support the financial sector as it responds to the impact of COVID-19 pandemic. In recognition of the high degree of ongoing uncertainty, policy initiatives will be responsive to the industry capacity and government priorities.
The recommencement of the assessing and issuing of new banking, insurance, and superannuation licenses will occur in two phases, with phase one starting in September 2020 and phase two in March 2021. New licenses issued during phase one 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. APRA will also accept new license applications from any entity from September 2020. From March 2021, APRA envisages new licenses may be issued to any entity that meets the relevant prudential requirements. APRA is also reviewing the pathways to an authorized deposit-taking institution license, including the restricted authorized deposit-taking institution licensing framework that was launched in 2018, to incorporate experiences to date, while continuing to support competition in the sector.
Related Links
Keywords: Asia Pacific, Australia, Banking, Insurance, Pensions, Superannuation, COVID-19, Remuneration, AASB 17, Insurance Contracts, IFRS 17, Regulatory Capital, Basel, Bank Licenses, APRA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
PRA Suspends Relevant Guidance Levels on Fixed Rate Lending LimitsNext Article
BIS Publishes Update on G20 TechSprint InitiativeRelated Articles
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA Finalizes Standards on Methods of Prudential Consolidation
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA Updates List of Other Systemically Important Institutions in EU
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS Report Concludes Basel Risk Categories Can Capture Climate Risks
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities Welcome FSB Review of their Remuneration Regime
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA Letter on Addressing Risks from Use of Deposit Aggregators
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA to Amend Banking Act and Rules in Coming Months to Transpose CRD5
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC Delegated Regulation on Specialized Lending Exposures Under CRR
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI Proposes to Enhance Assurance Expectations for Basel Returns
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB Issues Results of Benchmarking Analysis of Recovery Plans of Banks
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.