Risk Management

The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on HTFS Nominees Pty Limited (HTFS) to address prudential concerns relating to its investment governance and member outcome frameworks and practices, including oversight of platform investment options made available to super fund members.

HTFS acts as trustee for HUB24 Super Fund which has approximately 165,000 member accounts and over $55 billion in funds under management.

The imposition of additional licence conditions follows APRA’s thematic review of the investment governance, strategic planning and member outcomes practices of superannuation trustees that offer platforms (‘Platform Trustees’). Broadly, the review identified deficiencies in HTFS’s onboarding processes and practices for new investment options, investment option monitoring and reporting, management of conflicts of interest and approach to member outcomes.

Specifically, APRA’s review of HTFS identified concerns in relation to:

• lack of sufficiently rigorous, well-defined and consistently applied investment option selection criteria;
• quality of operational and investment due diligence undertaken for new investment options, including insufficient consideration and management of conflicts of interest and poor documentation;
• design and operational effectiveness of investment option monitoring and reporting frameworks in identifying and responding to performance and risk concerns;
• management of potential conflicts of interest, particularly where key decision-makers hold senior leadership positions within the parent or group, and governance arrangements lack an independent trustee voice; and
• assessment and oversight of member outcomes, including the implementation of controls to minimise potential harm to previously advised members.

Under the additional licence conditions, effective 29 May 2026, HTFS is required to:

• appoint an independent expert to undertake separate reviews of its platform investment menus and frameworks governing investment governance, conflicts management, strategic objectives and member outcomes;
• develop and implement an uplift plan to address identified gaps, and provide APRA with assurance that remediation actions are complete and operating effectively to address those gaps; and
• undertake a further review of its investment menu against the enhanced investment governance requirements to determine ongoing suitability of each investment option.

HTFS must also refrain from onboarding certain new high-risk investment options to its platform until an independent expert confirms the option has gone through an adequate onboarding process and an accountable person attests that all reasonable steps were taken to ensure the option is in members’ best financial interests.

APRA notes HUB24 Limited’s ASX announcement dated 21 April 2026 that it has exercised its option to acquire HTFS from EQT Holdings, subject to regulatory approvals. The licence conditions will apply notwithstanding any change of ownership to HUB24 Limited, which may implement new investment governance and oversight practices for HTFS.

APRA Chair John Lonsdale said: “This is the fifth Platform Trustee that APRA has taken enforcement action against and reflects APRA’s sustained focus on addressing prudential weaknesses identified through our review of Platform Trustees.

“Alongside enforcement action, APRA is closely supervising other in-scope Platform Trustees where improvement is necessary. APRA will continue to oversee the delivery of required actions and will hold trustees to account where they fail to make timely and sustainable improvements to investment governance and member outcomes.

“As part of this ongoing focus, we will also consider whether further enhancements to the relevant prudential standards and guidance are necessary.”

The Australian Prudential Regulation Authority (APRA) will keep its macroprudential policy settings steady following its latest review of domestic and international financial conditions and risks.

APRA’s macroprudential policy tools are aimed at mitigating financial stability risks at a system-wide level to promote a safe and stable financial system that enables households and businesses to confidently borrow, save and invest for the future.

APRA has today confirmed that:

• the mortgage serviceability buffer will remain at 3 percentage points;
• the countercyclical capital buffer will remain at 1 per cent of risk-weighted assets; and,
• high debt-to-income (DTI) lending limits remain unchanged, allowing banks to lend up to 20 per cent of new owner-occupied and investment loans at DTI greater than or equal to six times.

In deciding to keep its settings steady, APRA considered the high degree of uncertainty in the operating environment and the impact that the shift in the economic outlook is having on risks to financial stability.

In particular, APRA noted:

• households remain highly indebted. Housing credit growth for the March quarter was strong for investors and around average for owner-occupiers. However, there are signs of moderation in housing price and credit growth. Business credit growth remains above its historical average;
• pressure on household and business cashflows have increased due to higher inflation and interest rates but non-performing loans remain low. Strong buffers mean that most households and businesses are well placed to weather these pressures. The serviceability buffer helps ensure that recent new borrowers can continue to service their loans in the face of higher expenses and interest rates;
• higher risk forms of mortgage lending are contained and lending standards are sound. Based on preliminary March quarter data, high DTI lending remains well below APRA’s DTI limits and so the limits are not restricting overall bank lending. However, this type of riskier lending had been increasing over the past year and – given the uncertainty in the outlook – it is prudent for the limits to remain in place as guardrails for now; and
• the banking system remains well-capitalised and resilient and is well-positioned to absorb shocks should economic conditions deteriorate significantly.

APRA Chair John Lonsdale said that while existing settings remain appropriate for now, the risk landscape is volatile and could evolve rapidly.

“Since APRA’s last update, there has been a shift in the macroeconomic outlook. Interest rates have increased over recent months amid elevated inflation. The conflict in the Middle East is impacting economic and financial conditions in Australia, as higher oil prices add to cost pressures for households and businesses.

“Consumer sentiment and business confidence have weakened and downside risks to economic growth are heightened. Depending on global developments, these impacts could either ease or become more severe in the period ahead.

“At this stage, arrears and non-performing loans remain low and there is no evidence that the banking system is restricting credit supply to preserve capital positions in response to greater anticipated credit losses.

“APRA’s System Risk Outlook, released last week, highlighted that Australia’s financial system is resilient and well-positioned to support our economy in a potential downturn. APRA will remain alert for any early signs of risks materialising that could negatively impact financial stability and will adjust macroprudential settings if needed,” Mr Lonsdale said.

The Australian Prudential Regulation Authority (APRA) has confirmed plans to formally introduce a three-tiered approach to proportionality in its prudential framework for banking.

The measure is one of a number of reforms APRA moved to introduce as part of its response to the Council of Financial Regulators’ Review into Small and Medium-Sized Banks. The CFR review was undertaken in consultation with the Australian Competition and Consumer Commission (ACCC). It also aligns with APRA’s strategic commitment to get the balance right between its primary mandate for financial safety and stability and other considerations such as competition and efficiency.

Following a consultation that closed earlier this year, APRA today wrote to banks confirming it will proceed with the following proposals aimed at embedding additional proportionality and driving competition in the industry:

• Introducing a third tier of Most Significant Financial Institutions (MSFIs) for banks with total assets greater than $300 billion
• Raising the asset value threshold for banks to qualify as a Significant Financial Institution (SFI) from $20 billion to $30 billion; and
• Automatically providing a 12-month transition period when a regulated institution moves to a higher tier.

APRA also commits to providing non-SFIs with additional time to comply with new and revised prudential requirements when it is appropriate to do so.

APRA Executive Board Member, Therese McCarthy Hockey said: “Today’s changes reflect APRA’s ongoing commitment to building further proportionality into the banking framework and our supervision practices.

“This proportionality will only deepen over time as we look for more opportunities for greater differentiation between each of the banking tiers with each new piece of policy development.”

The changes take effect from 1 July 2026.

The letter formally responding to submissions to the consultation is available on the APRA website at: Formalising a three-tiered approach to proportionality in banking prudential framework

ASIC is seeking feedback on its proposal to remake legislative instruments that provide relief around managed investment schemes.

Under the proposal, the instruments, which are due to expire on 1 October 2026, will be extended for five years.

The legislative instruments to be remade are:

• ASIC Corporations (Serviced Apartment and Like Schemes) Instrument 2016/869
• ASIC Corporations (Property Rental Schemes) Instrument 2016/870
• ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813
• ASIC Corporations (School Enrolment Deposits) Instrument 2016/812
• ASIC Corporations (Horse Schemes) Instrument 2016/790, and
• ASIC Corporations (Attribution Managed Investment Trusts) Instrument 2016/489.

ASIC has assessed that these legislative instruments continue to form a necessary and useful part of the legislative framework.

Aside from minor changes to improve clarity and consistency, the content of the instruments will remain unchanged.

ASIC is also proposing to remove transitional provisions that are no longer necessary. This includes the relief in section 6 of ASIC Corporations (Attribution Managed Investment Trusts) Instrument 2016/489. This was intended to assist responsible entities transitioning to the attribution managed investment trust regime.

Providing feedback

ASIC invites feedback on their proposal and questions relating to ASIC Corporations (Horse Schemes) Instrument 2016/790. Submissions are due by 5pm AEST on 24 June 2026 and should be sent to rri.consultation@asic.gov.au.

Refer to CS 53 Proposed remake of six legislative instruments relating to managed investment schemes

ASIC is warning consumers who have joined ‘share trading’ or ‘stock tips’ messaging app groups that scammers are using these forums to push investments on fake crypto-asset trading platforms.

These fake platforms show profits and trades, but in fact, there is no real trading, and the site contains fake data. Any money deposited into these platforms goes straight to the scammers.

View the full media release.

The Full Federal Court has re-sentenced former investment manager Rodney Forrest to five years and three months’ imprisonment following his appeal for insider trading and procuring others to trade in more than $3 million of Platinum Asset Management shares.

View the full media release.

The Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) have published the public notes from the life insurance CEO roundtable held on 15 April 2026.

The roundtable was hosted by APRA Member Suzanne Smith together with ASIC Commissioner Alan Kirkland. It was attended by 19 life insurance CEOs and other executives, as well as representatives from Treasury and the Council of Australian Life Insurers.

The notes can be found on the APRA website at: APRA and ASIC host life insurance CEO roundtable – April 2026

Chair Joe Longo delivered opening remarks at the Tech Council of Australia’s Future of Innovation in Australia’s Financial Markets event in Sydney on 21 May 2026.

Here are the highlights of Joe’s remarks:

• ASIC has launched new research which shows innovation is now impacting nearly every part of the global financial sector.
• As these technological changes accelerate, Australia’s challenge is not simply to keep up, but to stay ahead.
• If we do not embrace new market technologies now, we could be poorer for it as a nation in the future.

Find out more in the full speech.

New research released today by ASIC shows that Australia is well-placed to harness an ongoing surge of financial innovation.

The Innovation in Financial Technology and RegTech research, conducted by the Digital Finance Cooperative Research Centre (DFCRC) for ASIC, lays out how Fintech and Regtech innovations are evolving across the world.

View the full media release.

ASIC has commenced civil penalty proceedings in the Federal Court against Equity Trustees Superannuation Limited (Equity Trustees), alleging failures in care, skill and diligence concerning the decision to allow members to invest in the First Guardian Master Fund (First Guardian).

View the full media release.

The Australian Prudential Regulation Authority (APRA) has intensified its oversight of banks, insurers and superannuation trustees as geopolitical tensions, artificial intelligence (AI) and growing complexity in global markets reshape the risk environment.

The update is contained in the latest edition of APRA’s System Risk Outlook report, which provides an overview of risks and vulnerabilities affecting the financial system from the perspective of Australia’s financial safety regulator.

Coming at a time of elevated uncertainty globally, today’s report reinforces Australia’s financial system is well-prepared to withstand a range of severe downside scenarios, including a deep global recession combined with higher funding costs and operational disruptions.

Other key insights include:

• Australia’s financial system is well-positioned to support the economy if conditions deteriorate in the current volatile environment. Banks and insurers remain well capitalised and have strong liquidity positions, while stress testing shows the system can withstand a range of “severe but plausible” shocks. To maintain resilience in an environment of heightened uncertainty, APRA has intensified its oversight of entities and sharpened its expectations for sound risk management.
• AI is being adopted rapidly across all regulated industries, but governance arrangements have not matured at the same pace. At the same time, cyber threats are becoming more sophisticated, including from advanced AI models. APRA recently reinforced its expectations for sound AI governance and risk management via a letter to industry.
• Although private credit remains relatively small in Australia, risks are growing internationally. Australian institutions are exposed to offshore developments through multiple channels, creating potential spillover risks that warrant close monitoring.

APRA Chair John Lonsdale said that while our financial system remains strong and stable, heightened vigilance is needed to keep it that way in a turbulent global political and economic environment.

“Strong capital, liquidity and prudential safeguards mean our financial system is well-positioned to absorb shocks and continue providing critical services to households and businesses, even if economic conditions deteriorate.

“Sustaining that resilience, however, will require ongoing investment in strong risk management across the system.

“Among the areas we are most focused on are rapid developments in AI, which are outpacing the ability of many entities to manage the risks, and potential impacts on Australia’s financial system flowing from the war in the Middle East and other geopolitical volatility.

“Moving forward, we will continue to assess how APRA-regulated entities are being impacted by overseas events and how well prepared they are for a range of potential downside scenarios, as well as seeking further uplift in cyber security capabilities and AI governance,” Mr Lonsdale said.

Today’s full report is available at: System Risk Outlook – May 2026

The next edition of the System Risk Outlook will be published towards the end of the year.

The Australian Prudential Regulation Authority (APRA) has revoked Eric Insurance Limited’s (Eric’s) authorisation to carry on insurance business in Australia under the Insurance Act 1973, following a request by Eric’s deed administrators.

Eric appointed voluntary administrators on 28 July 2025 and, following a meeting of creditors, executed a deed of company arrangement (DOCA) on 19 September 2025.

By virtue of the execution of the DOCA, Eric has no remaining liabilities in respect of its insurance business.

APRA has actively monitored Eric’s exit from the general insurance market for some time.

An updated list of general insurers can be found on the APRA website at: Register of general insurance

The Australian Prudential Regulation Authority (APRA) has disqualified the former chair of Xinja Bank Limited (Xinja), Lindley Edwards, from being an accountable person of any authorised deposit-taking institution¹ under the Financial Accountability Regime (FAR).

Ms Edwards is disqualified for a period of six years for failing to comply with her accountability obligations as an accountable person of Xinja during 2020. Ms Edwards is the third accountable person of Xinja that APRA has disqualified. APRA announced its disqualifications of Eric Wilson for eight years and non-executive director Craig Swanger for 10 years on 9 October 2025.² This is now APRA’s third disqualification under the FAR.

The disqualification follows APRA investigating the impact on Xinja’s capital position of undisclosed “side agreements” between Xinja and some of its investors in 2020 and whether Xinja misled APRA about its true capital position. APRA’s investigation began in May 2021 and Ms Edwards’ disqualification has been the subject of review processes.

APRA determined that Ms Edwards failed to comply with several of her obligations as an accountable person under the Banking Executive Accountability Regime, which the FAR superseded for the banking industry in March 2024.

APRA found that Ms Edwards failed to:

• act with due skill, care and diligence when Xinja raised capital that she should have known could not qualify as CET1 capital³ because of the side agreements and did not take steps to ensure that Xinja properly classified and reported the capital, or disclosed the side agreements, to APRA;
• deal with APRA in an open, constructive and cooperative way by not informing, or being satisfied that Xinja had informed, APRA of the existence of the side agreements or of concerns raised at the time within Xinja about the capital; and
• take reasonable steps to prevent matters arising that would adversely affect Xinja’s prudential standing where she did not take steps to put in place adequate procedures within Xinja to ensure Xinja properly classified and reported the capital it raised.

APRA’s decision did not involve allegations or findings of dishonesty or lack of integrity on the part of Ms Edwards.

APRA Member Therese McCarthy Hockey said Ms Edwards’ disqualification is further demonstration that APRA will hold senior individuals to account when they fail to meet their accountability obligations.

“In order to protect depositors and the financial system, it is essential APRA has a complete understanding of the capital position of the banks it supervises and their ongoing capacity to withstand unexpected shocks. It is incumbent on senior individuals to be open and cooperative with APRA so that APRA can effectively assess the risks that a bank and its depositors are exposed to. Board members are in a position of ultimate responsibility for all aspects of governance, oversight and compliance with all relevant laws and Ms Edwards’ conduct fell short of her duties.

“Ms Edwards inappropriately relied on others and failed to ensure that Xinja was sufficiently capitalised in the months leading to its failure, or that its true capital position was reported to APRA. Her disqualification reflects the seriousness of her conduct.”

Background

Between May and August 2020, Xinja entered agreements with three investors by which it purported to raise CET1 capital.  Xinja reported to APRA that the capital it raised from the investors was CET1 capital. However, the capital raisings involved “side agreements” between Xinja and the investors, which APRA was not informed of and which fundamentally altered the nature of the capital, altering its ability to absorb losses and resulted in the capital not qualifying as CET1 capital.

Xinja (now A.C.N. 618 937 054 Limited) is in liquidation after returning its deposits and handing back its ADI licence to APRA in 2021.

Footnotes

¹ Ms Edwards is also disqualified from being or acting as an accountable person of any authorised non-operating holding company (NOHC) of an ADI and any significant related entity of an ADI or NOHC of an ADI.

² APRA disqualifies two directors of Xinja Bank under Financial Accountability Regime | APRA

³ CET1 capital represents the highest quality capital that an ADI must hold and ensures an ADI is able to absorb losses immediately when they occur.

ASIC has outlined key focus areas for its financial reporting, audit and sustainability reporting activities in the 2026-27 financial year, including updates to its surveillance programs.

View the full media release.