Financial Crime World

ASIC and APRA Strengthen Cooperation to Protect Consumers and Ensure Prudential Management

In a continued effort to ensure the stability and integrity of Australia’s financial system, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have reaffirmed their commitment to cooperation and collaboration.

Key Areas of Cooperation

The two agencies have collaborated on several fronts, including:

  • Loan Repayment Deferrals and Borrower Hardship: ASIC and APRA worked together with the banking industry to provide relief to customers affected by loan repayment difficulties due to the COVID-19 pandemic.
  • Superannuation Guidance: ASIC and APRA ensured that guidance to trustees was integrated, providing clarity on current and new obligations prompted by the crisis.
  • Business Interruption Insurance: The agencies shared data and analysis to understand industry exposure, policyholder protection, and solvency implications, actively participating in a cross-agency working group with Treasury and the Australian Financial Complaints Authority (AFCA) to assess the issue and advance the business interruption insurance test case with industry.
  • Information Sharing and Coordination: ASIC and APRA have aligned communication on key policy changes, such as updates to their respective frameworks due to changes in accounting standards relating to insurance contracts.

Ongoing Priorities

In 2021, ASIC and APRA will continue to prioritize cooperation and collaboration, focusing on:

  • Implementation of Royal Commission Recommendations: The agencies will implement Recommendation 6.9, which requires them to cooperate, share information, and notify each other of suspected entity breaches of laws administered by the other.
  • Regulatory Reforms: The agencies will work together on implementing consumer credit and superannuation reforms, preparing for the Financial Accountability Regime (FAR), and improving performance assessment frameworks.

Conclusion

ASIC and APRA’s strengthened cooperation ensures that Australia’s financial system remains robust and resilient. As the country continues to recover from the COVID-19 pandemic, the agencies will remain committed to supporting businesses and consumers while ensuring prudential management and consumer protection.