Australian Prudential Regulation Authority signals a stronger focus on proportionate regulation in its next Corporate Plan and confirms its new operational risk standard is imminent

In a speech, the Australian Prudential Regulation Authority (APRA) Chair set out how APRA is sharpening its focus on balancing financial safety and stability with competition, efficiency and the compliance burden as it develops its next Corporate Plan for the coming 12 to 18 months. While exploring where requirements could be made more proportionate, APRA indicated it does not see a case to wind back the capital and liquidity resilience built over decades. The remarks pointed to APRA’s recent efforts to simplify and streamline the prudential framework, particularly to ease pressure on smaller institutions, while noting that an increasingly uncertain operating environment is elevating non-financial risks. APRA cited cyber risk, geopolitical risk and operational risk as top concerns and confirmed its new prudential standard on operational risk management will come into force in two weeks; it also referenced its 2019 information and cyber security prudential standard and a subsequent lift in information security and authentication control expectations following reports of criminal breaches affecting multiple superannuation funds. APRA said the forthcoming Corporate Plan will set out its priorities for the next 12 to 18 months, with work focused on finding a more sustainable balance between resilience objectives and regulatory burden.