APRA published its updated corporate plan with a sharpened focus on regulating non-financial risks and improving outcomes for superannuation members. The Corporate Plan for 2019-2023 sets out a roadmap for reinforcing APRA’s strong track record for safeguarding financial stability, while lifting its capabilities in other key areas to better address emerging and future challenges. The 2019-2023 corporate plan comes into effect immediately.
The content of the plan has been influenced by the findings of six separate reviews and inquiries over the past 18 months that examined aspects of APRA’s regulatory approach and performance, including the financial services Royal Commission review and the recent Capability Review. In response, the new corporate plan of APRA has identified four areas of strategic focus aimed at strengthening outcomes for the Australian community:
- Maintaining financial system resilience. This includes milestones such as moving from a three-yearly to an annual stress-testing cycle for authorized-deposit taking institutions; improving the data submitted by authorized-deposit taking institutions to enhance the prudential supervision of the industry by APRA; implementing changes to strengthen the capital prudential standards that apply to authorized-deposit taking institutions; and strengthening governance and risk management practices in the superannuation industry.
- Improving outcomes for superannuation members. This includes improving quality and consistency of superannuation data submitted to APRA, publishing additional data on the APRA assessment of superannuation performance, facilitating implementation of legislation and strengthen prudential standards, improving the transparency of supervisory actions taken by APRA, and publishing results of benchmarking exercises.
- Improving cyber-resilience across the financial system. This strategic focus area covers implementing changes to the prudential standards, implementing new supervision practices to assess cyber resilience, and uplifting industry practice to manage cyber incidents.
- Transforming governance, culture, remuneration, and accountability across all regulated financial institutions. In this area, focus will be on introducing baseline indicators to assess governance practices and risk culture, increasing thematic reviews of governance, measuring risk culture across industries, and implementing the revised remuneration prudential standard.
To deliver on the strategic priorities of APRA, the Corporate Plan also identifies a number of key areas where APRA will focus on lifting its internal capabilities over the next four years:
- Improving and broadening risk-based supervision including review of supervisory approach of APRA, implementation of new enforcement approach of APRA, improvements in analysis of external environment of APRA.
- Improving resolution capability by developing resolution planning prudential standard for authorized-deposit taking institutions and insurers, conducting formal resolution planning, and improving recovery planning for authorized-deposit taking institutions and insurers.
- Improving external engagement and collaboration by developing and implementing communications plan, in addition to strengthening collaboration with domestic and international peer agencies.
- Transforming data-enabled decision-making by implementing data strategy of APRA, which includes reviewing data collected by APRA.
- Transforming leadership, people, and culture by defining and articulating the desired culture of APRA, implementing initiatives to support desired culture, developing leadership capability uplift plan, implementing new structure of APRA.
Keywords: Asia Pacific, Australia, Banking, Insurance, Pensions, Superannuation, Corporate Plan, Stress Testing, Governance, Cyber Resilience, Resolution Planning, APRA
Previous ArticleMAS Sets Up Committee to Drive Interest Rate Benchmark Transition
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.