The Australian Prudential Regulation Authority (APRA) today released for comment a Policy Discussion Paper on the Prudential Supervision of Conglomerates. An earlier version of the paper, issued in March 1999, set out initial thoughts on the development of a consistent and logical policy framework for the supervision of conglomerates. The March Paper has now been revised following extensive consultation and discussion with financial institutions and others in the financial sector.

The main aim of these proposals is to provide more flexibility in the way conglomerate groups are organised, while ensuring that high standards of safety and soundness are maintained.

The proposals in the new Policy Discussion Paper relate mainly (as before) to conglomerate groups that contain an Authorised Deposit-Taking Institution (ADI). However, the principles being developed should have relevance to conglomerates incorporating any regulated financial institution and APRA will be seeking to broaden their application over time. The proposals also have regard to the work on this topic being carried out internationally under the auspices of the Joint Forum and by regulators in individual countries.

APRA is inviting comments on the new proposals by end January 2000. Following consideration of submissions, it will incorporate final proposals into prudential standards on conglomerates to be issued under the Banking Act in the middle of 2000.

The new paper (as well as the March 1999 version of the Paper) can be found on APRA's web-site at www.apra.gov.au.

For further information contact:

Gloria Peterson
02 9210 3385