The Australian Prudential Regulation Authority (APRA) has today released for consultation a discussion paper and four draft cross-industry prudential standards that consolidate and harmonise a number of prudential standards across APRA-regulated industries.
The four draft standards will replace 12 current industry-specific standards in the following areas:
- business continuity management;
- governance; and
- fit and proper.
APRA's approach to date has been to issue prudential standards and guidance material on an industry-by-industry basis. This means that very similar, but not necessarily identical, prudential requirements on behavioural matters currently apply to authorised deposit-taking institutions, general insurers, life companies and authorised or registered non-operating holding companies.
The draft standards released today largely reflect the industry-specific prudential standards and APRA does not propose to revisit the substance of these standards. However, some amendments are proposed in order to harmonise and clarify the current requirements across the industries; these amendments are detailed in the discussion paper.
Harmonisation of these standards across the APRA-regulated industries will streamline APRA's prudential requirements and make it easier for industry to comply with the standards. It will also facilitate APRA's proposals for the supervision of conglomerate groups.
Comments are invited on the proposals to release cross-industry standards and any transitional issues relating to the proposals. Submissions on the discussion paper and draft prudential standards are due by 25 March 2011.
Subject to industry feedback, APRA will release the final prudential standards in mid 2011. APRA envisages that the final standards will be effective from 1 July 2011.
The consultation package can be found on the APRA website.