The Australian Prudential Regulation Authority (APRA) has taken a leaf out of the Australian Securities and Investments Commission (ASIC) play book and has signalled its greater use of publicly naming institutions and superannuation funds against which it takes action.
The regulator’s approach has been outlined in its latest Enforcement Approach policy within which has said it will consider how it publicises its enforcement actions on a case by case basis but has made clear it will typically move to make such actions public.
“APRA will consider when and how to publicise the enforcement actions it takes on a case by case basis. However, unless there are likely to be risks to beneficiaries’ interests and / or financial stability from publicising an action, APRA will typically make public:
Announcing the new enforcement approach, APRA deputy chair, John Lonsdale described it as a “constructively tough” enforcement appetite indicative of a willingness by APRA to use its powers “more assertively to hold regulated entities and their leaders to account”.
“Getting ‘constructively tough’ is not only about taking stronger action earlier where banks, insurers and super licensees break the law, or fail to behave in an open and cooperative manner with us. It also means setting public examples where it is appropriate to do so and there’s no risk to financial stability,” he said.
“Publicising our enforcement actions not only acts as a general deterrent, it gives the community confidence that financial institutions are being held to account when they do the wrong thing,” Lonsdale said.
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
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