The Australian Prudential Regulation Authority (APRA) continues to emphasise the importance of its collection of financial industry data from the entities it regulates to confirm that regulated institutions are meeting minimum prudential requirements and to identify and manage emerging risks.

APRA has broad data collection powers, primarily under the Financial Sector (Collection of Data) Act 2001. APRA also collects data on a confidential basis on behalf of other regulators and the Treasury to assist in fulfilling their mandates and the formulation of financial policy. Background.

APRA has published a letter outlining plans to commence the first annual review of its data collection directions roadmap.

APRA’s response paper to previous submissions notes that a significant investment is anticipated by industry to uplift data capabilities and prepare for new reporting requirements.

Entities also indicated that data required to be submitted to APRA for prudential or supervisory purposes are not always used to operationally manage the business. In some cases, the provision of data specifically for regulatory purposes was seen as an additional burden especially where data elements were difficult to source internally.

In response APRA says that reporting of data to regulators is a key component of the provision of financial services. As such this will continue to be a requirement for industry however APRA will act to minimise the reporting burden wherever possible.

APRA’s letter sets out the focus areas for each industry:

Banking: Capital Framework, Liquidity and Interest Rate Risk in the Banking Book (IRRBB) data collections, Economic and Financial Statistics (EFS) definition changes, and Points of Presence.

APRA has confirmed that it will not progress the Comprehensive Credit Collection as described in the collection roadmap.

Insurance: AASB17 / PHI Capital collections, Strategic collections.

Superannuation: APRA intends to commence formal consultation in November this year on proposed reporting standards for investments (including indirect investment costs), registrable superannuation entity (RSE) and RSE licensee profile, and RSE licensee financials.

Cross-Industry: Remuneration, Non-financial risk collections, FAR (subject to passing by Parliament).

APRA directs Sureplan Friendly Society to fix data reporting

The Australian Prudential Regulation Authority (APRA) has announced that it has directed Sureplan Friendly Society Limited (Sureplan) to rectify the incorrect capital treatment of one of its assets.

The matter was brought to APRA s attention by an independent auditor conducting a Special Purpose Engagement (SPE) for the purposes of validating actuarial calculations for Sureplan’s funeral expense products and assessing the robustness of processes for reporting data to APRA.

APRA ordered the SPE after losing confidence in the accuracy of the quarterly capital data submitted by Sureplan, in part due to the frequency of the entity s data resubmissions. 

In addition to the instance of incorrect capital treatment, the SPE also recommended a range of enhancements to Sureplan s reporting practices. While the capital matter did not raise immediate concerns about Sureplan s prudential soundless, APRA has instructed the entity to remediate the issue in a timely manner. APRA says Sureplan has now taken action to remediate the matter.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.