FRAA releases questions for its APRA review

Submissions are open for the second report by the Financial Regulator Assessment Authority (FRAA) into how the Australian Prudential Regulation Authority (APRA) is resolving and supervising superannuation.

This was the second report for the FRAA, which was set up in 2021 following a recommendation by the Hayne Royal Commission, following an earlier one into the Australian Securities and Investments Commission (ASIC) which published its report in August 2022.

FRAA said: “The first review of APRA will be a targeted assessment of the effectiveness and capability of APRA’s supervision and resolution functions, focusing on superannuation.

“The scope of the review excludes matters that are under consideration in other reviews or consultations, such as the review of the Your Future, Your Super laws.

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There were a series of questions for supervision and resolution of APRA

For supervision, these were:

• Are APRA’s supervisory priorities clearly communicated by APRA staff to the regulated population and external stakeholders?
• Does APRA clearly communicate and implement its supervision activities, and are supervision activities appropriately targeted?
• How effective is APRA’s supervision in achieving APRA’s objectives? Are there any gaps in APRA’s supervisory activities in superannuation?
• To what extent does APRA have the appropriate organisational capabilities (including, people, data, technology, and systems) for detecting prudential risks, prioritising issues, and conducting its supervisory activities to achieve the right outcomes?
• What steps has APRA taken to effectively reduce the regulatory impost of its supervisory activities? How could APRA improve?
• How has APRA’s supervisory activities and the nature of its relationship with stakeholders changed following recent independent inquiries and reviews?

For resolution, the questions were:

• How well is APRA’s resolution function communicated to and understood by the regulated population?
• How well has APRA prepared industry for the introduction of APRA’s resolution framework?
• How effective is APRA’s resolution function in promoting appropriate outcomes for members?
• To what extent does APRA have the appropriate organisational capabilities (including, people, data, technology, and systems) for achieving the right outcomes?

Submissions were open until 15 December, 2022.