Mackay Chapman November 2025 APRA Update

In this month’s APRA update:

• APRA consults on refinements to CPS 230 for non-traditional service providers
• Refined capital framework for longevity products
• APRA revises governance reform proposals after industry feedback
• New Reconciliation Action Plan for 2025–27
• APRA urges platform trustees to strengthen investment oversight

Keep reading for more detail.

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APRA consults on refinements to CPS 230 for non-traditional service providers

APRA will consult on targeted amendments to CPS 230 Operational Risk Management before the end of 2025, responding to industry concerns about applying the new standard to non-traditional service providers such as stock exchanges, payment schemes and clearing facilities.

These arrangements often operate under standardised, non-negotiable terms, making full contractual compliance challenging. APRA’s proposed changes aim to clarify expectations around contract uplift and service-level monitoring, easing implementation burdens while maintaining operational resilience.

The regulator plans a short, one-month consultation to finalise the amendments before July 2026, ensuring a smoother transition without altering the core risk management obligations under CPS 230.

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Refined capital framework for longevity products

APRA has opened a second consultation on proposed changes to the capital framework for longevity products, including annuities. The reforms aim to encourage growth and competitive pricing in retirement income products, while maintaining strong safeguards for policyholders.

Following industry feedback on its initial proposals, APRA has shifted toward a more principles-based approach to determining capital requirements. The move is intended to balance innovation and financial stability across the life insurance sector.

Submissions on the draft prudential standards are open until 17 December 2025, with details available in APRA’s consultation paper Adjustments to the capital settings for longevity products.

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APRA revises governance reform proposals after industry feedback

APRA has refined its planned overhaul of governance standards for banks, insurers and superannuation trustees following extensive industry consultation.

Key changes include extending the proposed tenure limit for non-executive directors to 12 years, scrapping a requirement for certain independent directors to sit outside group boards, and withdrawing early engagement requirements for significant institutions on responsible person appointments.

APRA will also clarify expectations around director skills, conflicts of interest and disclosure of relevant interests. Chair John Lonsdale said the updates aim to lift governance standards while maintaining flexibility across diverse business models. 

Updated prudential standards and guidance will be released for further consultation in early 2026.

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New Reconciliation Action Plan for 2025–27

APRA has released its Innovate Reconciliation Action Plan (RAP) for October 2025 to September 2027, its third RAP since 2017 and second at the “Innovate” level. 

The plan focuses on creating a more inclusive workplace, expanding RAP activities across APRA’s five offices, and deepening engagement between staff and First Nations communities.

A key focus is on increasing Aboriginal and Torres Strait Islander recruitment and development, enhancing cultural awareness, and building partnerships that advance reconciliation within the financial sector in collaboration with other regulators.

The new RAP complements APRA’s inclusion and diversity strategy and reflects its ongoing commitment to reconciliation through meaningful, long-term action.

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APRA urges platform trustees to strengthen investment oversight

APRA has called on superannuation platform trustees to take stronger, faster action to protect member investments following its thematic review of the sector. 

The regulator’s letter to trustees outlines key findings, examples of weaker practices, and required steps to address governance and monitoring gaps.

Deputy Chair Margaret Cole said APRA would increase supervisory intensity and “not hesitate to take robust regulatory action” where trustees fall short. 

The call underscores APRA’s growing focus on investment governance and member outcomes across Australia’s $397 billion superannuation platform sector.

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The contents of this article and any linked articles do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such. They are designed and intended as general information in summary form, current at publication, for general informational purposes only. You should seek legal or other professional advice concerning any particular legal matters you or your organisation may have.

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