What Is APRA?
APRA is the Australian financial services industry prudential regulator and the Australian Government’s statutory authority. This means they are responsible for creating a framework that focuses on the financial safety and stability of the broader financial system in Australia.
The APRA was established on July 1st, 1998, based on the recommendation of the Wallis Inquiry. Their headquarters are in Sydney, New South Wales, with 586 employees. The jurisdiction of the APRA includes the Commonwealth of Australia.
The executives at the APRA include Wayne Byres (chairman), Helen Rowell (deputy chairman), John Lonsdale (Deputy Chairman and Margret Cole (member). The regulatory bodies that preceded the APRA include the Insurance and Superannuation Commission, the Reserve Bank of Australia and the Australian Financial Institutions Commission.
What Is the APRA Responsible For?
In this section, we will cover the primary responsibilities of APRA and how they work to protect the integrity of the Australian financial system. In summary, the APRA oversees:
Life insurers
General insurers
Authorised deposit-taking institutions like building societies, banks and credit unions
Friendly societies, private health insurers
Reinsurance companies
Superannuation funds
The APRA has the task of protecting the interests of superannuation fund members, policyholders and depositors under the legislation that the APRA administers. Additionally, they promote the financial system's stability by working in close proximity with the Reserve Bank of Australia, Australian Securities and Investments Commission and Australian Treasury.
Furthermore, the APRA has the duty of being the financial sector’s national statistical agency. The data is collected for internal uses and the Australian Bureau of Statistics, and the Reserve Bank of Australia. The data is provided in their statistical publications.
Why Is the APRA Important?
Now let us take a closer look at how the APRA helps regular consumers and the overall importance of the regulatory body. This will provide insight into why they are an integral part of the Australian financial system.
Competitive neutrality: the APRA seeks to provide a fair and competitive financial landscape within the Australian economy. It does this by deploying long-term measures and balancing multiple objectives. Promoting stability in the markets is another one of their aims that interlinks with this one. The Australian economy benefits from neutrality because it prevents businesses from creating a monopoly in specific industries.
Protects interests of depositors: consumers that send money to banks or other financial institutions need to have faith their money will not be gone one day due to mismanagement. The APRA provides peace of mind for depositors, insurance policyholders and superannuation fund members. It is an essential entity because it acts as a layer of protection to avoid the loss of funds due to bad financial practices.
Laws of the Commonwealth: the APRA ensures that the laws of the Commonwealth are followed daily. They monitor the financial practices of financial institutions and follow up on questionable behaviour. The active approach means they are a forward-thinking regulator. It means they can stop harm occurring in the system by being proactive ahead of time.
Long-term financial well-being: by fulfilling its duties, the APRA is a vital cog in the system for promoting the long-term stability of the Australian markets. This is important for money transfer services because it ensures banking practices are scrutinised. Otherwise, it would be the wild west where financial institutions could handle depositor money as they please.
An example of the APRA working in action is when they fined Capital Finance Australia Limited $703,500 on August the 8th, 2019. The specific law that was broken is Subsection 13(9) of the FSCODA act. Basically, they failed to provide the correct documentation within the proper time frame for 335 daily offences.
APRA Regulations
In this section, we will provide you with an in-depth look at the specific laws that the APRA is responsible for upholding, the crimes to protect against and what industries it oversees.
Regulations: the APRA is responsible for operating under the laws of the Australian Government. The laws provide the APRA with formal powers that can be used to enforce the law on behalf of the Australian Government.
The APRA has created a prudential framework for the banking, insurance and superannuation industries. Additions and changes to this framework go through a period of public debate and consultation before being set in stone.
Crimes: crimes the APRA protects against are completed with other Australian regulatory bodies. However, it takes part in stopping money laundering, unauthorised banking practices, theft, identity fraud and counterfeit activity.
Industries: the industries that the APRA is in charge of overseeing include authorised deposit-taking institutions (banks, credit unions), general insurance, life insurance and friendly societies, private health insurance and superannuation.
Accountability: the APRA is accountable to the Australian Government. They provided the APRA with the relevant powers by law to carry out their duties.
What Regions Does the APRA Cover?
The APRA is in charge of monitoring the financial system of Australia. This includes various aspects of the Australian financial system in every region around the country. The APRA also has an international agenda that allows them to work with regulators worldwide. The purpose of this collaboration is to promote information sharing in the case of international money transfers. This enables the APRA better complete its duties.
When Might You Encounter the APRA?
The APRA is a proactive regulator, which means they welcome early contact from consumers if they have an issue. They are also looking for possible problems in Australia’s financial system and seeking to remedy them before the issue worsens.
Individuals using money transfer services might be contacted by the APRA if they break Australian laws. For example, when sending money to and from suspicious accounts or when there is evidence of money laundering. In many instances, the APRA might contact consumers to clarify transactions, and it is nothing more than a routine checkup. They are involved in the day-to-day monitoring of Australia’s financial system, which means they follow up on reports of questionable money transfers made by banks and other financial institutions.
Can the APRA Make New Rules?
The APRA has the legal power to make new legislation, but it goes through a period of deliberation and review. The rules can also be debated publicly before being adopted. This makes the APRA a transparent regulator that has a democratic nature.
The APRA goes out of its way to consult with industry experts and stakeholders. This allows them to get a balanced overview of a piece of new legislation they are considering putting into practice.
For example, the APRA created a new prudential standard called CPS 511 Remuneration (CPS 511), which comes into effect on January 1st of, 2023. This new legislation seeks to introduce heightened requirements on remuneration and promote financial resilience to provide better outcomes for customers.
How to Contact the APRA?
The APRA can be contacted for a variety of reasons, and you can do so using these methods:
Email: info@apra.gov.au
Phone: in Australia - 1300 558 849 and outside of Australia it is +61 2 8037 9015.
The opening hours for the call centre are 9.00 am - 5.00 pm AEST except for public holidays.
Other Regulators
Bottom Line
To summarise, the APRA is an essential cog in the Australian economy. They help oversee various aspects of how financial institutions in Australia handle depositor money. This is perfect for money transfer consumers that want to ensure their funds will be adequately protected. Additionally, the APRA has legal powers from the Government of Australia, which means they are a noteworthy regulator.
We encourage you to continue learning more about money transfers in Australia by checking out the other guides on our websites. You can start with Send Money To Australia and Send Money from the United States to Australia. These guides will give you ideas on how to save money, get the best FX rates and reduce the transfer time.
