The ASIC – APRA relationship
The role of ASIC
The Australian Securities and Investments Commission (ASIC) is Australia’s financial markets conduct regulator. ASIC is responsible for promoting a fair, transparent and efficient financial system for all.
ASIC regulates the conduct of Australian companies, financial markets, financial services organisations (including banks, life and general insurers and superannuation funds) and professionals who deal in and advise on investments, superannuation, insurance, deposit-taking and credit. ASIC is also responsible for authorisations to operate in industries it regulates.
The role of APRA
The Australian Prudential Regulation Authority (APRA) is Australia’s financial system prudential regulator. APRA is responsible for the licensing and regulatory oversight of financial entities to protect the interests of depositors, insurance policyholders and superannuation fund members. It is also required to balance the objectives of financial safety and efficiency, competition, contestability and competitive neutrality and, in balancing these objectives, is to promote financial system stability.
APRA supervises banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies and most of the superannuation industry.
Cooperation and information sharing between ASIC and APRA
ASIC and APRA have a strong, open and collaborative working relationship and regularly consult and engage on matters of shared interest. Proactive cooperation between ASIC and APRA is important to strengthen the effectiveness and contribute to the efficiency of regulatory outcomes across the financial sector.
ASIC and APRA maintain a continual dialogue, which is facilitated through a formal–engagement structure led by the APRA-ASIC Committee (AAC) to enhance information sharing on both operational and strategic matters. The structure also includes regular liaison meetings an operational level to provide updates on, and input into, matters of mutual interest or concern.
ASIC and APRA have a Memorandum of Understanding (MoU) which sets out a framework for engagement, including coordination, cooperation and information sharing between the agencies.
As there can be alignment between the interests of ASIC and APRA, and the activities of one agency can inform or assist the work of the other, it is important that the agencies maintain strong engagement and proactively exchange information of interest to each other to achieve strong outcomes.
Under the MoU, ASIC and APRA have agreed to:
- proactively provide appropriate information and documents that are relevant to the other agency and responding promptly to information and document requests;
- seek input from, or collaboration with, the other agency to achieve or improve regulatory outcomes, particularly in policy development, enforcement actions, consultation with industry and statistical collections; and
- seek to improve efficiencies for the agencies and industry participants.
Disclosure of protected information
Information about financial sector entities received by ASIC or APRA is generally protected under the relevant secrecy provisions in the Australian Prudential Regulation Authority Act 1998 (Cth) or the confidentiality provisions in the Australian Securities and Investments Commission Act 2001 (Cth).
However, the legislation is not an impediment to information-sharing; it permits APRA and ASIC to share protected information with each other to further their respective regulatory mandates.
Other forms of information sharing
APRA collects data from financial sector entities under the Financial Sector (Collection of Data) Act 2001 (Cth) for a number of purposes, including to assist other financial sector agencies, such as ASIC, to perform their functions or exercise their powers.
As members of the Council of Financial Regulators, ASIC and APRA also regularly liaise with other financial regulatory agencies including the Reserve Bank of Australia and the Australian Treasury to ensure actions are aligned and where necessary, coordinated with the work of other bodies.
ASIC and APRA also coordinate with each other in relation to our various roles in international regulatory bodies, such as the Financial Stability Board, Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the International Organization of Securities Commissions and the International Organisation of Pension Supervisors.