The Australian Prudential Regulation Authority has published its first handbook aimed at helping the directors of banks, credit unions, and building societies to understand and comply with the prudential regulator’s regulatory requirements.
APRA’s new Guide for Authorised Deposit-taking Institution (ADI) Boards has been developed as part of the regulator’s multi-year initiative to modernise the prudential architecture. The guide brings all of APRA’s existing requirements and accompanying guidance in one place.
APRA said it also plans to review its cross-industry standards and guidance covering governance next year, to examine how to rationalise and streamline the requirements and guidance relating to boards.
APRA Chair John Lonsdale said the Guide for ADI Directors will help boards navigate the dozens of different prudential standards and prudential practice guides (PPGs) that make up APRA’s prudential framework for ADIs.
“APRA’s ADI prudential framework plays an essential role in protecting the community by supporting the ongoing soundness and stability of banks and the financial system, especially in times of economic difficulty,” Lonsdale said. “We recognise, however, that its complexity can make it challenging for boards to understand all of their requirements, creating a risk that key obligations could be missed.
“The new guide will become a one-stop shop that brings together all of the standards and PPGs needed to help directors navigate requirements that are specific to them. It will also help those that support directors in fulfilling their role, such as company secretaries, and management teams. Although it’s currently a substantial document, over time the guide will be pared back as our modernisation agenda creates a simpler, more rationalised prudential framework.”
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