The Australian Prudential Regulation Authority (APRA) has announced Terms of Reference for a review of its enforcement strategy.

The Review will be led by APRA Deputy Chair John Lonsdale.

The Review will conduct an examination of APRA’s approach to the use of enforcement to achieve its prudential objective of ensuring that financial promises made by its supervised institutions are met within a stable, efficient and competitive financial system.

APRA established the enforcement review in recognition both of new regulatory responsibilities under the Banking Executive Accounting Regime, as well as case studies examined by the Royal Commission.

The final Review will be presented to APRA Members by 31 March 2019. Following consideration of the Review’s recommendations, APRA expects to release publicly both the final review and APRA’s enforcement strategy.

The Review will make recommendations on:

a) the breadth of issues APRA seeks to address through public and non-public enforcement action;
b) the considerations in determining when APRA should take enforcement action to hold entities and individuals to account, including under the Bank Executive Accountability Regime (BEAR) and other powers;
c) the considerations in determining whether and when it may be appropriate for APRA to take public enforcement action, including litigation, to achieve general deterrence effects in appropriate cases; and
d) APRA’s internal governance, organisation, enforcement strategy, resourcing and any other factors relevant to APRA’s enforcement function.