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.
Keywords: Asia Pacific, Australia, Banking, Insurance, Pensions, Superannuation, COVID-19, Remuneration, AASB 17, Insurance Contracts, IFRS 17, Regulatory Capital, Basel, Bank Licenses, APRA
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
ISSB Standards May Become Effective from January 2024
The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.