Mackay Chapman May 2024 APRA Update

In this month’s APRA update:

• APRA to publish super fund expense data;
• APRA releases minor updates to the prudential framework for ADIs and insurers; and
• APRA publishes Chair John Lonsdale’s speech to AFR Banking Summit.

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APRA to publish super fund expense data

APRA is enhancing transparency in superannuation by publishing new data on fund expenses and detailed asset allocation, following industry consultation last year.

Starting August 2024, the published expenditure data will include breakdowns of expenses for the entire industry and individual funds, covering categories like administration, advice, marketing, and trustee board expenses. It will also detail payments to industrial bodies, related parties, and political donations.

Additionally, APRA will disclose more information on industry investments in property, infrastructure, alternative strategy funds, listed equity, and private equity.

Deputy Chair Margaret Cole emphasised the importance of this data in revealing how trustees manage member funds and acknowledged industry support for APRA's transparency initiatives.

Through its Superannuation Data Transformation project, APRA aims to expand data quality and accessibility, continually improving transparency in the sector.

For further details, APRA's Superannuation Data Transformation publications and confidentiality response letter are available on their website.

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APRA releases minor updates to the prudential framework for ADIs and insurers

APRA has launched a consultation on minor updates to the prudential framework for ADIs and insurers, aimed at ensuring timely technical clarifications without significant policy changes.

The proposed amendments are primarily technical in nature and aim to enhance clarity. Submissions are invited until 3 May 2024.

For details, including the letter to ADIs and insurers, draft standards, and guidance, visit the APRA website.

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APRA publishes Chair John Lonsdale’s speech to AFR Banking Summit

“Good morning. I’m pleased to be speaking to the AFR Banking Summit again this year. There are always many topics for a prudential regulator to discuss about the banking system – the challenge is to choose a couple. 

So I have decided to talk further today about financial system safety and the work that must be constantly undertaken to ensure the system is as safe and resilient as we can make it.

Only weeks before this event last year, global financial markets were in turmoil after several American banks failed and European giant Credit Suisse only narrowly avoided the same fate. Amid fears the crisis could impact Australia, the summit presented an opportunity to re-emphasise the strength of the Australian banking system, including some of the ways it is safer than many overseas jurisdictions. 

Fortunately, we avoided real contagion impacts, in part due to more than a decade of strengthening capital requirements and introducing new liquidity and interest rate risk measures. 

However, there are still lessons for us.”

Read or watch the full speech here.

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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.