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APRA releases consultation package on disclosure of composition of capital and remuneration

9 Apr 2013
13.08

The Australian Prudential Regulation Authority (APRA) today released a consultation paper and draft prudential standard relating to Pillar 3 disclosures on the composition of capital and on remuneration by authorised deposit-taking institutions (ADIs) in Australia.

As part of the Basel III capital reforms released by the Basel Committee on Banking Supervision in December 2010, ADIs will be required to disclose additional information on their capital adequacy and capital instruments. These disclosure requirements will, among other things, inform the market of the composition of ADIs’ regulatory capital in a standard form that will allow market participants to compare the capital positions of banking institutions in different jurisdictions.

ADIs will be required to publish a reconciliation between their regulatory capital and financial statements. They will also need to disclose full details of the terms and conditions of each regulatory capital instrument and a summary of those instruments in a standard form.

In addition, APRA will be consulting on its proposed implementation of the Basel Committee’s requirements for ADIs to disclose qualitative and quantitative information about their remuneration practices and aggregate remuneration data for senior managers and material risk-takers. APRA had foreshadowed these requirements, which take account of the Financial Stability Board’s Principles for Sound Compensation Practices (2009), in a letter to ADIs in October 2011.

APRA is proposing that the requirements commence for the first reporting period on or after 30 June 2013.

The package released today can be found on the APRA website at: http://www.apra.gov.au/adi/PrudentialFramework/Pages/April-2013-Consultation-Basel-III-Disclosure-Requirements.aspx

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding $4.2 trillion in assets for almost 23 million Australian depositors, policyholders and superannuation fund members.

Media and industry enquiries only:

Andrew McCutcheon
Head of Media and Communications
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660
 
All other enquiries:

APRAinfo 1300 558 849