Australian Prudential Regulation Authority (APRA) has embarked on a multi-year program to modernise the regulatory framework, with the aim to make it “clearer, simpler and more adaptable”. In an information paper published on Monday, the regulator said the program, which commenced last year, is intended to ensure the framework continues to underpin financial safety and stability in a rapidly changing economic and technological environment. This, it noted, will be achieved through a series of initiatives involving better regulation and incremental changes in the design of the framework, the use of digital technology, and a strategic approach to new rules for new risks.
“Since APRA’s creation in 1998, the prudential framework has expanded and evolved in response to new risks, changes in legislation and developments in the external environment,” said APRA chair, Wayne Byres. “With 140 prudential standards and prudential practice guides now covering the five APRA-regulated industries — as well as letters, information papers and FAQs — the framework has become more complex, and in turn more challenging for entities to follow. “We need to ensure the framework is clear, simple and adaptable, to continue to be effective in setting minimum standards for banks, insurers and superannuation funds as technology, business models and community expectations change,” he explained.
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