APRA : Everything you need to know

APRA: Everything you need to know

Headquarters address

Level 12, 1 Martin Place, Sydney, New South Wales 2000, Australia
Year established 1998
Organization type Government agency
Size (employees) 600+
Function    Prudential regulation
Key people Wayne Byres (chair), Helen Rowell (deputy chair), John Lonsdale (deputy chair), Margaret Cole (APRA member), Sean Carmody (executive director, insurance), Brandon Khoo (executive director, cross-industry insights and data division), Steve Matthews (chief operating officer, enterprise services), Therese McCarthy Hockey (executive director, banking), Suzanne Smith (superannuation), Renée Roberts (executive director, policy & advice)

About APRA

The Australian Prudential Regulation Authority (APRA) is an independent statutory authority that oversees institutions across the banking, insurance, and superannuation space, including:

  • Authorised deposit-taking institutions (such as banks, building societies, and credit unions)
  • General insurers
  • Life insurers
  • Friendly societies
  • Private health insurers
  • Reinsurance companies
  • Superannuation funds (other than self-managed funds)

APRA promotes financial system stability by working closely with the Australian Treasury, the Reserve Bank of Australia (RBA), and the Australian Securities and Investments Commission (ASIC). It is responsible for protecting the interests of depositors, policyholders, and superannuation fund members.

The body also acts as a national statistical agency for the financial sector, collecting data both for its own use and on behalf of the RBA and the Australian Bureau of Statistics (ABS). The information it compiles is released in its statistical publications.

Vision and values

APRA’s vision is focused on two strategic themes: “Protected today” and “Prepared for tomorrow.”

Its values, meanwhile, highlight the critical role the government body plays in protecting the financial well-being of Australians. Through its work and the services it provides, APRA seeks to demonstrate:

  • Integrity: “We act without bias, are balanced in the use of our powers, and deliver on our commitments.”
  • Collaboration: “We actively seek out and encourage diverse points of view, to produce well-founded decisions”
  • Accountability: “We are open to challenge and scrutiny and take responsibility for our actions.”
  • Respect: “We are always respectful of others, and their opinions and ideas.”
  • Excellence: “We maintain high standards of quality and professionalism in all that we do.”

“Working and acting in these ways helps us achieve the high standards necessary for us to protect the financial well-being of the Australian community,” APRA wrote on its website. “Our supervisory approach is forward-looking, primarily risk-based, consultative, consistent and in line with international best practice. This approach also recognises that management, and boards of supervised institutions are primarily responsible for financial soundness.”

Functions

APRA uses a broad range of tools to supervise financial institutions and promote the stability of the broader financial system. These include:

Licensing

APRA issues licenses to banking, insurance, and superannuation businesses, allowing them to operate. It also supervises them to ensure that the financial promises made to their beneficiaries – including depositors, policyholders, and superannuation fund members – are kept.

Prudential standards

APRA establishes prudential standards that regulated institutions must comply with. These standards set out a range of requirements in relation to financial soundness, risk management, and governance.

Supervision

After an institution receives its license, it is subject to ongoing supervision to ensure it is meeting the body’s prudential requirements. APRA supervisors do this by examining data and reports about institutions and the broader financial sector and visiting supervised institutions to speak to staff and examine records and files.

APRA’s supervision aims to identify potential financial or operational weaknesses in an institution as early as possible, and ensure they are rectified before they can threaten its safety and soundness.

Enforcement

If APRA has concerns about a supervised institution’s prudential strength or risk management, it will seek to work cooperatively with the management and directors to have those issues promptly addressed. If the institution is uncooperative or APRA considers it necessary, it can take a range of enforcement actions against an institution or individuals associated with that institution to protect the interests of depositors, policyholders, and members of superannuation funds.

Leadership at APRA
Wayne Byres – Chair

Byres was appointed as a member and chair of APRA in July 2014 for a five-year term. He was subsequently reappointed for a second five-year term commencing July 2019. He is also the body’s representative on the Payments System Board, Council of Financial Regulators, Trans-Tasman Council on Banking Supervision, Basel Committee and its oversight body, the governors, and heads of supervision.

Byres started his career in the RBA, which he joined in 1984. After more than a decade in the central bank, which included a secondment to the Bank of England in London, he transferred to APRA on its establishment in 1998. He subsequently held a range of senior executive positions within the body, covering both its policy and supervisory divisions. In late 2011, Byres left APRA to take up the appointment as Secretary General of the Basel Committee on Banking Supervision, the global standard-setting body for banks based at the Bank for International Settlements in Basel, Switzerland. He held this position until his return to Australia in mid-2014.

Grants & scholarships

APRA and the RBA established the Brian Gray Scholarship program in memory of Brian Gray, who died on 24 August 2001 while serving as executive general manager of APRA’s Policy, Research, and Consulting Division.

The program funds up to four $15,000 scholarships annually to support final year Honours and PhD students in finance, economics, actuarial science, econometrics, statistics, or related disciplines, who intend to focus full time on their studies and research.

Under the program, the recipients will devote a substantial amount of time to an agreed research topic and present their findings to APRA upon completion. Scholarship holders may also be able to gain valuable work experience with the body during their final year of study.

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