APRA’s place in the wider regulatory environment

Australia’s financial system is overseen by five regulators:

1. The Australian Prudential Regulation Authority (APRA) – the financial safety regulator.
2. The Australian Securities and Investments Commission (ASIC) – the conduct regulator for corporations and financial markets.
3. The Australian Competition and Consumer Commission (ACCC) – the competition regulator.
4. The Reserve Bank of Australia (RBA) – Australia’s central bank.
5. The Australian Transaction Reports and Analysis Centre (AUSTRAC) – Australia’s financial intelligence unit and anti-money laundering and counter-terrorism financing regulator.

These regulators protect the financial wellbeing of the Australia community, but each one achieves this goal differently and has a different area of focus.

At the same time, these regulators regularly share information and work together to protect Australians’ financial interests. One of APRA’s strategic priorities is to continue to strengthen its relationships with its peer financial regulators.

You can read more about APRA’s role and mandate here.

Australian Securities and Investments Commission

APRA and ASIC are often referred to as the “twin peaks” of Australia’s system of financial regulation. Like APRA, ASIC regulates aspects of the Australian financial system.

But whereas APRA is Australia’s financial safety regulator, focused on the soundness of individual financial institutions, ASIC is the conduct regulator, responsible for detecting and punishing misconduct in the industry, and for achieving good outcomes for consumers and investors.

ASIC regulates the conduct of Australian companies, financial markets, financial services organisations (including banks, life and general insurers and superannuation funds) and professionals who operate in those sectors. ASIC is also responsible for regulating consumer credit.

Since 2018, the APRA-ASIC relationship has grown even closer to better address the types of misconduct, poor performance and weak accountability that were raised during the financial services Royal Commission.

You can find out more about the APRA-ASIC relationship here.

The Reserve Bank of Australia

The RBA is Australia’s central bank and is responsible for the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. The RBA does this by setting an official cash rate for the country (known as monetary policy), and overseeing the stability of the financial system.

The RBA also regulates the payments system, provides banking services to government departments, manages Australia’s gold and foreign exchange reserves and issues the nation’s bank notes. The RBA has the ability to provide emergency liquidity support to the financial system in times of stress.

The Australian Competition and Consumer Commission

The ACCC promotes competition and fair trade in markets to benefit consumers, businesses, and the community. It also regulates national infrastructure services.

The ACCC’s primary responsibility is to ensure that individuals and businesses comply with Australian competition, fair trading, and consumer protection laws, particularly the Competition and Consumer Act 2010 (previously the Trade Practices Act 1974).

APRA is engaging more closely with the ACCC to better assess how APRA’s prudential framework impacts on competition.

Australian Transaction Reports and Analysis Centre (AUSTRAC)

AUSTRAC is responsible for preventing, detecting, and responding to criminal abuse of the financial system, such as fraud, child exploitation, tax evasion and other serious and organised crime.

AUSTRAC collects and analyses information from over 15,000 regulated entities. By partnering with law enforcement and national intelligence agencies, this information is used to generate financial intelligence in order to protect the Australian community from serious and organised crime. AUSTRAC provides guidance and advice to businesses on how to protect their businesses and the financial system from criminal exploitation.