APRA is organised into five divisions.
Specialised Institutions Division
The Specialised Institutions Division is responsible for the supervision of some 500 licensed entities. These specialised institutions include regional banks, credit unions, building societies, friendly societies, insurers and superannuation funds.
Diversified Institutions Division
The Diversified Institutions Division is responsible for the prudential supervision of more than 250 functionally diversified financial institutions. These include large financial conglomerates, banks, insurance companies and superannuation firms.
The frontline divisions of APRA focus on financial and risk analysis as the primary part of their supervision function. This involves off-site analysis of data and information, regular contact with the supervised institutions as well as a continual program of on-site reviews of those institutions.
Staff in both Specialised and Diversified Divisions are involved in:
- assessing the financial safety implications of mergers, acquisitions and major changes to financial institutions’ business operations:
- monitoring institutions’ financial position and outlook;
- assessing the main risks in and risk management systems of financial institutions; and
- dealing with problem situations and problem institutions;
- licensing new financial institutions.
Policy, Research and Statistics Division
PRS’s job is to ensure that APRA’s supervisors and other staff possess the best possible tools to support them in their risk analyses and supervisory interventions. This division consists of the following areas:
Applied Research
The Applied Research Unit forms part of the Quantitative Analysis Group in PRS. The unit undertakes a broad range of tasks including research into potential risk issues facing the various industries supervised by APRA, subsequent production of reports, writing and publication of academic research papers, facilitating seminars and provision of internal training.
Policy Development
The Policy Development Unit develops prudential policy proposals and advice; liaises with government agencies, other financial regulators (in Australia and overseas) and industry groups, and monitors regulatory and market developments in the financial sector.
Basel II
The Basel II Unit's main responsibilities revolve around coordinating, developing and communicating APRA’s implementation of the Basel II Framework for assessing bank capital adequacy. The Basel II team consults widely amongst Australian ADIs and overseas prudential supervisors in order to ensure that the implementation of Basel II in Australia is consistent with overseas best practice, and that it is also appropriate for the Australian market.
Statistics
The Statistics Unit provides essential information and analysis on Australia’s financial sector. APRA supervisors use the data on individual regulated institutions in risk assessments, and as an early warning of risks within an individual institution and across industries. The Unit also collects data on behalf of the Reserve Bank of Australia and the Australian Bureau of Statistics. The Unit’s published statistics inform many decision-makers in the Australian financial system — including policy-makers, market analysts, researchers and senior management of financial institutions — and ultimately contribute to a more stable, competitive and efficient financial system.
International Relations
The International Relations Unit is responsible for responses to all international contacts with which APRA is involved. It supports frontline activities by handling international relations activities as needed, including: providing answers to international information requests; assisting APRA staff access information overseas; coordinating visits by international delegations and making presentations where required; making arrangements for confidential information exchange; and, organising APRA’s international Technical Assistance efforts.
PAIRS
The PAIRS Unit forms part of the Policy, Research and Statistics Division in APRA. It is the owner of APRA’s ‘Probability and Impact Rating System’ or ‘PAIRS’ risk assessment framework. The unit is responsible for the ongoing review and enhancement of the ‘PAIRS’ methodology and application and associated implementation initiatives. It also evaluates and, where appropriate, acquires and oversees the use of externally developed early warning risk assessment tools to supplement the central ‘PAIRS’ model.
Supervisory Support Division
Within SSD, there are five main service areas which provide advice and support. Brief details of these areas are given below:
Actuarial, Market & Insurance Risk Services (AMIRS)
AMIRS consists of three specialist teams: Actuarial Services, Balance Sheet & Market Risk and Insurance Risk, which keep up-to-date with developments in risk management methodology and best practice in each of the disciplines and work with frontline supervisors in analysing a regulated entity’s risks and assessing if appropriate risk management is in place.
Actuarial Services provide advice and guidance on actuarial issues which arise in the frontline supervision of, and development of prudential requirements for, insurers, friendly societies and superannuation funds. Two key areas of work are assessing the valuation of liabilities and providing commentary on actuarial reports.
The Balance Sheet & Market Risk team provides advice and guidance to frontline supervisors, and in the development of prudential requirements, in relation to traded and non-traded market risk, liquidity risk, asset liability management, investment risk and unit pricing. The team is also responsible for assessing the internal models used for market risk capital adequacy.
The Insurance Risk team provides advice and guidance to frontline supervisors of, and in the development of prudential requirements for, life and general insurers, in the areas of underwriting, claims management, product development, pricing, liability valuation and reinsurance.
Credit & Operational Risk Services (CORS)
CORS consists of two specialist teams: Credit Risk and Operational Risk, which keep up-to-date with developments in risk management methodology and best practice in each of the disciplines and work with frontline supervisors in analysing a regulated entity’s risks and assessing if appropriate risk management is in place.
The Credit Risk team provides advice and guidance to frontline supervisors on the full range of credit risk management including: credit culture; policies and procedures; loan assessment, approval and monitoring; loan loss provisioning and risk measurement; and control / enforcement methodologies; and in the development of prudential requirements for credit risk.
The Operational Risk team provides advice and guidance to frontline supervisors on the full range of operational risk management including: information technology; internal control frameworks; capital modelling; business continuity planning; and outsourcing; and in the development of prudential requirements for operational risk. The Operational Risk team comprises three specialist units:
Operational Risk: reviews operational risk frameworks and controls;
Information Technology Risk: reviews IT risk management and controls;
Quantitative Applications: reviews operational risk measurement and capital allocation methodologies.
Enforcement
Supervises entities that are, or which seem destined to, exit the industry. Also supervises representative offices of foreign banks and the registration and categorisation of Registered Financial Corporations..
Handles issues that are likely to lead to APRA’s formal enforcement powers being used. These are used to either force an entity to take corrective action to not fail, limit the damage to a troubled entity and the loss to beneficiaries, or to deter other entities from engaging in illegal or unacceptable practices. Actions include: issuing of directions, formal investigations, enforceable undertakings, freezing of assets and disqualification of individuals, as well as action against unregulated entities breaching APRA administered legislation.
Enforcement is comprised of the South-Western team based in Melbourne and the Northern team based in Sydney and Brisbane.
Industry Technical Services
Provides industry and technical advice to frontline supervisors relating to the interpretation and application of the prudential standards and legislation that APRA administers. Helps maintain and improve a number of APRA supervision tools, systems and processes. Provides support to APRA’s four Industry Groups, including undertaking industry-wide analysis and liaison. Provides technical advice in the development of prudential requirements.
ITS has five teams dealing with ADIs, general insurance, life insurance, superannuation and project.
Legal Group
Legal Group has two teams: the Advice and Drafting team and the Litigation and Enforcement team.
The Advice and Drafting team provides legal advice across a broad range of matters, including APRA’ s corporate governance, APRA’s secrecy provision, and legal issues relating to prudential supervision and administrative law. The team drafts statutory instruments and co-ordinates the retention of external law firms and barristers to advise on non-litigation matters or drafts non-litigation related documents and handles subpoenas and statutory notices served on APRA.
The Litigation and Enforcement team appears on behalf of APRA in all litigation matters and briefs Counsel to appear on APRA’s behalf. It also supervises the activities of external law firms when they appear in litigation on APRA’s behalf. The team also advises and provides legal support to Enforcement.
Resilience and Response Development
A key part of APRA’s mission is to maintain a capacity to respond swiftly and effectively to regulated institutions whose solvency or liquidity is threatened, or to major disruptions affecting large parts of the financial system, while also being prepared to cope with disruptions to its own operations. Often these threats emerge unexpectedly and escalate rapidly.
RRD currently has three projects underway that are designed to improve APRA’s capacity to respond to, and remediate financial crises and operational disruptions. They are:
Financial Entity Crisis Management;
ADI Liquidity Supervision Framework; and
BCP Enhancement and Pandemic Planning
Corporate Services Division
The Corporate Services division is responsible for the provision of policy and services with respect to corporate governance, public affairs, human resources, quality assurance and consistency, risk assessment and internal audit, information technology, finance and administration.
Secretary
This unit is responsible for providing secretariat support and advice on governance to the Executive Group, Management Group, Risk Management and Audit Committee and other governance structures. This includes ensuring the proper maintenance of APRA’s corporate records and history through Information Management; APRA’s Contact Centre (located in Canberra) which deals directly with the public on matters including early release of superannuation benefits and general queries; APRA’s library service; management of relationships with government departments and external agencies such as the Commonwealth Ombudsman; the complaints and compliance functions; internal whistleblowing; and the administration of ethical issues such as staff disclosure of interests in APRA-regulated entities.
Public Affairs
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identifies, develops, implements and manages communication strategies across internal and external stakeholder environments, including media, industry, beneficiaries, government and employees;
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develops and delivers messages on organisational goals, objectives and positioning in the areas of issues and crisis communications management, corporate communications, public relations, reputation management, media management, marketing communications, brand management, internal communications and communications auditing and benchmarking;
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performs desk top publishing and graphic design services for APRA publications and communication strategies;
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coordinates the APRA internet site, including ongoing publishing, content review and providing other web supported needs; and
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handles copyright and conference speaking requests, collates an APRA events calendar and deals with/channels some public and industry enquiries.
Human Resources
The Human Resources section is responsible for the development and implementation of strategies for human resources such as: workplace relations, remuneration and benefits, learning and development, performance management, recruitment, workplace diversity, occupational health and safety, payroll, leave and superannuation.
Risk Assessment and Internal Audit
The Risk Assessment and Internal Audit unit is responsible for providing assurance and advice to management and the Risk Management & Audit Committee (RM&AC) regarding the effectiveness of APRA’s risk management, governance, supervision practices and performance and control frameworks.
Information Technology
Information Technology is responsible for providing computing support and services to APRA. This includes Help Desk, technical advice, development and consultancy services to staff to ensure that APRA’s business needs are met.
Finance
Finance is responsible for the funding of APRA through levies on industry and the control over the disbursement of those funds. This is achieved through planning, budgeting, accounting and the processing of financial transactions. This includes the management of financial assets and liabilities.
Administration
Corporate Administration provides key services such as: facilities and property management including maintenance and office security; mail and reception services; and the procurement of goods and services.
