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Regulatory Developments …8 November- 12 November

Friday 12 November 2021

Open Consultations

Consultation on macroprudential framework

Regualted entities will have until the 28 February 2022 to make submissions on Australian Prudential Regulation Authority’s (APRA)
macroprudential policy measures which the regulator said will promote financial stability in the Australian financial system. 

APRA Chair Wayne Byres said in  an official statement, “APRA has a wide range of tools it could potentially deploy in such circumstances. Today’s paper is intended to give financial industry stakeholders a better understanding of the factors APRA considers in making decisions to use these tools, the types of macroprudential measures APRA could deploy in the future, and how they might be implemented.”

Consultations on Credit Risk Management
The Prudential regulator also indicated that they will be updating the prudential guidance on  
credit risk management for authorised deposit institutions. 

New Guidance
This week saw the last version of the Australian Prudential Regulation Authority’s (APRA) prudential guidance of insurance in superannuation.

The regulator highlighted three critical areas for regulated entities:

  • strengthen arrangements to protect members from potential adverse outcomes caused by conflicted life insurance arrangements. This will include robust decision-making in the negotiation and ongoing review of insurance arrangements;
  • obtain an independent certification of related party insurance arrangements before entering into, or materially altering, an insurance arrangement, and on a triennial basis. Rather than mandating certification for priority and privilege arrangements, APRA has responded to industry concerns by enhancing the prudential framework to emphasise that trustees must be alert to any business practices or terms and conditions in insurance arrangements that may not be in the best financial interests of beneficiaries; and
  • strengthen data management to improve analysis of member outcomes across different groups of superannuation fund members.