Australian Prudential Regulation Authority

For the similarly named British body, see Prudential Regulatory Authority (United Kingdom).

Australian Prudential Regulation Authority

Type	Statutory authority
Founded	1 July 1998
Headquarters	Sydney
Employees	580
Website	apra.gov.au

The Australian Prudential Regulation Authority (APRA) is a statutory authority and the prudential regulator of the Australian financial services industry.

Regulatory scope

APRA oversees banks, credit unions, building societies, friendly societies, general insurance and reinsurance companies, life insurance and most members of the superannuation industry. It was established on 1 July 1998. APRA is funded largely by the industries that it supervises. APRA currently supervises institutions holding approximately A$3.6 trillion in assets for 22 million Australian depositors, policyholders and superannuation fund members.

It regulates banks, general and life insurance companies, superannuation funds, credit unions, building societies and friendly societies to ensure that these institutions keep their financial promises; that is, that they will remain financially sound and able to meet their obligations to depositors, fund members and policy holders. APRA is also responsible for the registration of financial corporations.

History

In June 1996, the Financial System Inquiry (known as the Wallis Inquiry) was established to:

• examine the results of the deregulation of the Australian financial system;
• examine the forces driving further change, particularly technological; and
• recommend changes to the regulatory system to ensure an 'efficient, responsive, competitive and flexible financial system to underpin stronger economic performance, consistent with financial stability, prudence, integrity and fairness.

At the time, the regulators of the Australian financial services industry were based on the institutions and not the regulatory function. APRA's predecessor regulators were:

• The Insurance and Superannuation Commission (ISC);
• The Reserve Bank of Australia; and
• The Australian Financial Institutions Commission (AFIC).

The Wallis Inquiry recommended a new structure:

• the Reserve Bank of Australia (RBA) to deal with Monetary policy and systemic stability with the Payments System Board considering payments systems regulation;

• the Australian Prudential Regulation Commission (later to become APRA) to deal with prudential regulation of:
  • Authorised Deposit-Taking Institutions (ADIs)
  • Life and general insurance
  • Superannuation (including Industry superannuation);

• the Corporations and Financial Services Commission (a renamed and expanded Australian Securities & Investments Commission (ASIC) ) to deal with:
  • market integrity
  • consumer protection
  • corporations.

APRA was established on 1 July 1998 under the Australian Prudential Regulation Authority Act 1998.

APRA became prominent in the collapse of HIH Insurance in 2001 and for its investigation into the National Australia Bank foreign currency deal scandal in 2004.

The current chairman of APRA is Dr John Laker and the deputy chairman is Ross Jones.

Related legislation

APRA is an independent statutory authority established under the Australian Prudential Regulation Authority Act 1998 (Cth).

A complete list of legislation that APRA oversees can be found on the APRA website.

See also

• Australian Securities and Investments Commission

External links

• Official site