Mackay Chapman July 2026 APRA Update
In this month’s APRA update:
- Two new APRA Deputy Chairs appointed
- Diversa's executive remuneration practices investigated
- APRA consults on changes to bank capital settings
- Updated superannuation data reporting guidance
- Minimum expectations for geopolitical risk preparedness outlined
- Findings from inaugural System Risk Stress Test
Two new APRA Deputy Chairs appointed
The Treasurer has appointed Therese McCarthy Hockey and David Bradbury as APRA's new Deputy Chairs,each for a five-year term.
Ms McCarthy Hockey, who has served on APRA's Board since 2022, will continue overseeing banking supervision and formally commenced as Deputy Chair on 9 July 2026. Mr Bradbury, former Assistant Treasurer and current Chair of the Board of Taxation, will commence on 1 September 2026 and will oversee APRA's supervision of the superannuation industry.
The appointments complete APRA's leadership structure across banking, insurance and superannuation.
Diversa's executive remuneration practices investigated
APRA has commenced a formal investigation into Diversa Trustees Limited's executive remuneration decision-making and governance processes.
The investigation will examine whether remuneration decisions complied with APRA's prudential standards and trustees' obligations under the Superannuation Industry (Supervision) Act 1993.
The investigation is limited to remuneration governance and does not extend to the separate Federal Court proceedings brought by ASIC concerning losses arising from the collapse of the First Guardian investment.
APRA consults on changes to bank capital settings
APRA has released consultation proposals aimed at reducing capital requirements for certain categories of corporate lending while maintaining its "unquestionably strong" capital framework.
The proposals include lower risk weights for qualifying infrastructure lending, high-quality unrated corporate lending and additional residential land acquisition, development and construction (ADC) lending exposures.
According to APRA, the changes are intended to better align regulatory capital with underlying credit risk, increase lending capacity and support investment without weakening financial resilience.
Updated superannuation data reporting guidance
APRA has published seven additional frequently asked questions relating to its Superannuation Data Transformation reporting framework.
The updated FAQs provide further clarification for trustees on reporting requirements and are available on APRA's website.
Minimum expectations for geopolitical risk preparedness outlined
APRA has written to banks, insurers and superannuation trustees outlining its minimum expectations for managing geopolitical risks under existing prudential standards.
The regulator identified gaps in preparedness across governance, crisis planning and operational resilience, including limited consideration of sanctions, trade restrictions, foreign interference, cyber threats, reliance on overseas service providers and technology-related risks.
Larger institutions with greater geopolitical exposure will be required to complete targeted readiness assessments, while other regulated entities will be assessed through APRA's normal supervisory activities.
Findings from inaugural System Risk Stress Test
APRA has released the results of its first cross-industry System Risk Stress Test involving Australia's four major banks and six large superannuation funds.
The exercise examined how a severe market and liquidity shock could spread through the financial system, including the impact of bank funding pressures, large-scale superannuation withdrawals and the temporary outage of a critical service provider.
APRA found that all participating banks and superannuation funds remained resilient under the scenario, supported by strong capital positions, liquidity buffers and access to deep financial markets. However, the exercise also identified vulnerabilities associated with funding concentration, operational dependencies, common service providers and the growing systemic importance of the superannuation sector.
The findings will inform APRA's future supervisory priorities, including proposed changes to bank liquidity requirements, continued focus on operational resilience and further development of stress testing across regulated industries.
The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such. It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only. You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.
