The Australian Prudential Regulation Authority (APRA) will resume issuing new licenses and recommence public consultations on select policy reforms from September, 2020.
APRA chair, Wayne Byres said the authority believed it could restart both policy and consultations and licensing activity after suspending both due to uncertainty created by COVID-19.
The recommencement of assessing and issuing new banking, insurance, and superannuation licences would occur in two phases, with the first starting in September 2020, and the second in March, 2021.
APRA said new licences issued during phase one would be issued to applicants that were branches or subsidiaries of foreign entities with significant financial resources and a strong operational track record in a similar business. APRA would also accept new licence applications from any entity from September 2020.
From March 2021, APRA said it envisaged new licences to be issued to any entity that met the relevant prudential requirements. APRA was also reviewing the pathways to an authorised deposit-taking institution (ADI) licence, including the restricted ADI licensing framework that was launched in 2018, to incorporate experiences to date, while continuing to support competition in the sector.
“We now believe we can restart both policy consultations and licensing activity,” Byres said.
“However, it is neither possible nor desirable to pursue our full policy agenda for the time being. APRA therefore intends to narrow its policy activities in the remainder of this year to a small number of high-priority prudential policy reforms.”
The policy reforms that would be recommenced in 2020 through a process of public consultation were:
- The cross-industry prudential standard for remuneration;
- ADI capital reforms incorporating APRA’s unquestionably strong framework, Basel III and measures to improve transparency, comparability and flexibility;
- Insurance capital reforms to incorporate changes in the accounting framework (AASB 17); and
- The prudential standard for insurance in superannuation, and updated guidance on the sole purpose test.
APRA said it would also restart consultation on a limited number of its data collections, including the recommencement of its superannuation data transformation project.