Compliance Professionals

The Australian Prudential Regulation Authority (APRA) has commenced an investigation into Diversa Trustees Limited’s (Diversa) executive remuneration decision-making and processes.

The investigation will consider whether Diversa has complied with its regulatory obligations. In particular, APRA will investigate whether remuneration decisions were made in accordance with APRA’s prudential standards and trustees’ duties under the SIS Act.

APRA Chair John Lonsdale said: “Prudent remuneration practices play a critical role in driving sound governance and protecting the best financial interests of superannuation fund members.

“APRA expects superannuation trustees to ensure remuneration decisions reinforce accountability and appropriately reflect risk and performance outcomes, particularly in circumstances where member outcomes may have been adversely affected.”

The investigation will not consider whether Diversa is responsible for member losses arising from the collapse of First Guardian, which is currently the subject of ASIC’s proceedings in the Federal Court.

The Australian Prudential Regulation Authority (APRA) has published farewell remarks delivered by Deputy Chair Margaret Cole at a Conexus boardroom lunch.

In her remarks, Ms Cole reflects on her five-year tenure at APRA and highlights the role of transparency, performance and accountability in strengthening outcomes for superannuation members.

Her comments include:

• “Transparency in super is an important hard-won change that has benefitted millions of Australians.”
• “When you are responsible for other people’s money, you must be very careful what you spend it on. I’d consider this basic hygiene for super trustees. It’s also a requirement of the SIS Act and of Trust Law.”
• “The performance test has its detractors, but it has worked to achieve the objective for which it was designed – to enable transparency around performance outcomes and to facilitate change so that members do not get stuck in underperforming products.”

The full speech is available on the APRA website at: APRA publishes Deputy Chair Margaret Cole’s farewell remarks

The Australian Prudential Regulation Authority (APRA) has published a speech delivered this morning by Member Therese McCarthy Hockey to the AFIA Risk Summit in Melbourne.

In “Fighting fire with fire”, Ms McCarthy Hockey spoke about the need for banks, superannuation funds and insurers to move more urgently in response to the threats posed by frontier AI models and the looming realisation of encryption-breaking quantum computers.

• “As we race to identify and patch vulnerabilities before they can be exploited by bad actors, nothing will achieve this faster than AI – whether frontier models or the advanced models already in circulation. By harnessing AI to build the fire breaks we need to keep the flames from spreading, we can fight fire with fire.”
• “Frontier AI is not just a cyber risk issue. It’s third-party risk, a concentration risk and a sovereign access risk. A critical business process, control or cyber-defence capability that depends on a single offshore frontier AI model may be disrupted not only by an outage or cyber incident but by a regulatory decision made overseas.”
• “We expect to see organisations granted early access to frontier AI models sharing information and insights with peers and suppliers. Where one institution learns something material about AI-enabled vulnerabilities, model limitations, jailbreak techniques or defensive use cases, the system as a whole benefits when that knowledge is shared quickly and safely.”
• “Until recently, the hypothetical day when quantum computers become powerful enough to break the cryptographic security that currently protects global digital infrastructure was thought to be more than 10 years away. But advancements in computing technology, including AI, have led to speculation that cryptographically relevant quantum computing could become a reality much sooner – years earlier in fact.”

The full speech is available on the APRA website at: APRA Member Therese McCarthy Hockey’s remarks to the 2026 AFIA Risk Summit.

ASIC has put car finance providers on notice after identifying a range of concerns in relation to third party distributor arrangements, sales practices and monitoring of consumer outcomes.

View the full media release.

ASIC has made an order banning Brett Anthony Newbound and cancelling the Australian financial services (AFS) licence and Australian credit licence (ACL) of Freedom Wealth Services Pty Ltd.

View the full media release.

ASIC has today named 19 additional known entities involved in lead generation activities as part of its ongoing work to address practices that inappropriately or unnecessarily encourage consumers to switch their superannuation.

View the full media release.

The Australian Prudential Regulation Authority (APRA) has enhanced its website, apra.gov.au, delivering an improved user experience for regulated entities, industry professionals and the broader Australian community. The changes were informed by feedback from a broad range of stakeholders.

Key benefits of the new website include:

• Significantly improved navigation, search, filters and functionality to help our stakeholders locate information and resources more efficiently.
• Uplifted format and functionality for APRA’s prudential and reporting standards, helping regulated entities and others understand and meet their obligations.
• Dedicated landing pages for banking, superannuation, general insurance, life insurance and private health insurance, offering sector-specific information in a ‘one-stop shop’.
• Revised menu structure and quick links to find popular content more quickly.
• Integration of APRA’s prudential handbook into the broader website experience, joining up two key web services and simplifying the user experience.
• Accessible and inclusive website compliant with the government’s Digital Inclusion Standard and Web Content Accessibility Guidelines (WCAG).
• Enhanced security and compliance with the Government’s latest digital service standards.

The initiative supports APRA’s data and technology strategy, enhancing organisational effectiveness and laying the foundation for future improvements in transparency and communication using AI and data visualisation.

We invite you to share your feedback on the website upgrades using the in-page feedback tool or a short survey linked from the Contact us page.

Treasury has published a small business explainer and fact sheets regarding Capital Gains Tax and Discretionary Trusts Reform.
Downloads

The Australian Prudential Regulation Authority (APRA) has published a speech delivered this morning by Chair John Lonsdale to the Australian Banking Association’s 2026 Banking Conference in Melbourne.

In “A call to arms amid rising geopolitical risk”, Mr Lonsdale set out APRA’s minimum expectations for how banks, insurers and superannuation trustees should strengthen their readiness for geopolitical shocks.

• “Our intelligence agencies assess that the geopolitical environment is deteriorating rather than stabilising. Multiple, concurrent threats are now manifesting at scale – driven by intensifying strategic competition, more frequent grey-zone activity and mounting strain on the rules-based international order. These challenges can amplify traditional financial and operational risks to financial stability. They also increase the potential for non-traditional risks such as disinformation and foreign interference.”
• “The big challenges we see are coming in the form of non-financial and emerging risks such as geopolitical volatility, rapid technological innovation and operational risk management – which can all amplify traditional financial risks. It is in these areas that risk management across APRA-regulated industries is generally less mature.”
• “Last year, the Council of Financial Regulators strengthened its Geopolitical Risk Program, working with the country’s largest financial institutions to uplift geopolitical risk management. The insights APRA has gained from that work, as well as our supervisory interactions, have led us to conclude there are material gaps in the management of geopolitical risk across our regulated flock.”
• “As scenarios that might once have been farfetched become plausible or even realised, entities must enhance their understanding of what’s happening in the world and where they might be vulnerable. They also need to take action to address those vulnerabilities, shore up their defences and strengthen their preparedness for future geopolitical shocks.”

The full speech is available on the APRA website at: APRA publishes John Lonsdale’s remarks to the 2026 ABA Banking Conference

The Australian Prudential Regulation Authority (APRA) has written to banks, insurers and superannuation funds setting out its minimum expectations in relation to their readiness for geopolitical shocks.

APRA has grown increasingly concerned over recent years about the potential for adverse impacts on the financial system stemming from geopolitical shocks such as trade restrictions, sanctions and armed conflicts.

Although most entities are aware of geopolitical risks, APRA and other agencies on the Council of Financial Regulators have observed common gaps in how entities translate this into practical risk management and crisis preparedness.

These gaps include:

• actions by nation states to impose sanctions, restrict market access or reduce capital mobility are often not considered explicitly in business plans, or credit, funding and investment strategies;
• risk management practices are not keeping pace with rapidly evolving threats. These include personnel-related security risks, and risks associated with disinformation campaigns that could undermine confidence in an entity’s resilience;
• many boards are still developing the technical literacy needed to provide effective challenge on technology-related risks such as AI. Reliance on critical third parties, often located overseas, makes it more challenging to manage these risks; and
• crisis preparedness exercises are not always strong enough to give boards and management confidence that the entity could withstand and respond effectively to a severe geopolitical shock.

In response, APRA has written to all its regulated industries today setting out minimum expectations for geopolitical risk readiness in six key areas.

These include enhancing preparation for non-financial and non-traditional risks such as foreign interference, insider threats or cyber attacks connected to geopolitical developments.

These also include an entity’s preparation for traditional financial impacts through capital and liquidity planning as well as investment stress testing for potential scenarios such as market closure, sanctions and funding stress.

APRA Chair John Lonsdale said: “As a mid-size trade-exposed economy, Australia will always be impacted by what happens in the rest of the world – and right now the rest of the world is becoming more volatile and unpredictable.

“Today’s letter is a clear call to action as awareness is not enough. We need to see APRA-regulated entities integrate geopolitical risk into governance, risk management and crisis preparedness practices to strengthen their readiness for geopolitical shocks.

“Where APRA identifies heightened exposure, weak governance, or inadequate preparedness, we will take appropriate supervisory action to address these gaps,” Mr Lonsdale said.

The expectations outlined in today’s letter do not represent new prudential requirements; rather, APRA seeks to ensure entities use APRA’s existing prudential standards to better integrate geopolitical risk into governance, risk management and crisis preparedness.

Additionally, APRA will shortly write to a group of larger entities with heightened exposure to geopolitical shocks asking them to complete a targeted readiness assessment with a focus on crisis preparedness, personnel risks and political risks.

Entities outside this group are expected to take a risk-based and proportionate approach, with supervisors engaging through routine supervision.

Today’s letter is available on the APRA website at: Strengthening readiness for geopolitical shocks

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) will streamline aspects of the Financial Accountability Regime (FAR) to reduce regulatory burden without lowering accountability standards.

Under the regulators’ proposed changes, APRA and ASIC will remove key functions requirements from the FAR regulator rules; raise the materiality threshold for notifying APRA and ASIC of changes in accountability; and no longer require information on accountable persons’ direct reports in accountability maps.

APRA and ASIC estimate that the changes will reduce reporting for all accountable entities and the 4500 impacted accountable people. Further, the changes to accountability maps will at least halve the number of updates entities need to make.

APRA will today also commence consultation on removing all reporting requirements under its fit and proper regime (please refer to APRA’s consultation on governance reforms released today).

ASIC will streamline responsible manager Australian financial services licensing requirements for FAR entities by reducing requirements to submit evidence of competence from October 2026. This change will benefit approximately 2000 current Australian financial services licensees.

APRA and ASIC will consult on the changes and aim to implement them by the end of 2026. APRA and ASIC will also support the Government in its legislative changes to the FAR.

APRA Member Therese McCarthy Hockey said these reforms continue APRA’s commitment to reduce regulatory burden.

“The changes announced today get the balance right, ensuring the benefits of clarified accountabilities are retained in a proportionate way while allowing entities to get on with running their businesses,” Ms McCarthy Hockey said.

ASIC Commissioner Kate O’Rourke said the reforms align with ASIC’s multi-year program of regulatory simplification, with a recent report highlighting ASIC’s progress in making regulation clearer, more accessible and easier to navigate.

“Through our simplification work, we are focused on reducing regulatory burden while maintaining consumer protections, and that is what these reforms achieve,” Ms O’Rourke said.

The measures are part of APRA and ASIC’s contribution to the Government’s Better Regulation reforms, announced in the 2026-27 Budget. The Better Regulation reforms propose changes to FAR legislation, so that entities need only provide accountability statements and maps on request (rather than up front) and have more time to register their accountable persons.

APRA and ASIC’s changes announced today also form part of the Council of Financial Regulators’ broader package of actions designed to reduce regulatory burden and improve how regulators collect, share and use data.

The Australian Prudential Regulation Authority (APRA) has commenced the final phase of its governance review by setting out updated requirements designed to strengthen governance across banking, superannuation and insurance.

APRA’s requirements around governance and fitness and propriety aim to ensure its regulated entities are governed by leaders with the skills, experience and character needed for today’s challenging risk environment.

APRA began consulting on proposals to modernise its governance requirements in March last year before refining some of its proposals last October. Having engaged extensively with industry, APRA has today published a response to industry feedback as well as an updated draft of CPS 510 Governance for further consultation.

The new CPS 510 is designed to reflect contemporary best practice, establish clear benchmarks and address existing areas of poor practice by:

• strengthening requirements for board governance, conflicts management and the fitness and propriety of directors and executives;
• removing duplicative fit and proper reporting now that Financial Accountability Regime reporting is in place. These changes would mean forms are no longer required to be submitted for 6000 individuals;
• improving flexibility by enabling boards to delegate APRA’s board requirements in other prudential standards, and by aligning governance requirements with other codes and regimes where appropriate; and
• harmonising requirements by combining five existing prudential standards into one and setting consistent governance minimums for all APRA-regulated entities.

APRA Chair John Lonsdale said the new requirements will raise expectations for boards and senior leaders, while also freeing them up to focus on the matters most essential to financial and operational resilience.

“Strong governance is fundamental to the safety, resilience and performance of banks, insurers and super funds. Over a long period of time, APRA has observed that problems at our regulated entities can be frequently traced to poor oversight, unclear accountability or weak challenge,” Mr Lonsdale said.

“At a time of rising economic and geopolitical uncertainty, and where new technologies are rapidly changing financial services, our regulated entities need leaders who can respond decisively and effectively to financial stress and operational disruptions.

“Alongside lifting expectations, we’ve sought to strike the right balance between safety and efficiency. In allowing boards more freedom to delegate lower value compliance matters and reducing reporting, our goal is to ensure boards have capacity to direct their attention to the issues of most importance.”

APRA will consult until the end of August and is inviting feedback on the draft CPS 510, the proposed removal of routine fit and proper reporting, and related definitional changes in Prudential Standard CPS 001 Defined terms.

Feedback from consultation and stakeholder meetings will inform the final standard and related guidance, planned for release in late 2026. APRA expects the new requirements to take effect from early 2028.

The consultation package is available on APRA’s website at: Proposed changes to governance