Regulators called to face parliamentary scrutiny

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have been called to appear before the House economics committee at a public hearing on Wednesday, 5 August.

The hearing will form part of the committee’s reviews of the 2019 APRA Annual Report and 2019 ASIC Annual Report.

“Despite COVID-19, we are getting on with the job – the hearing will provide the committee with the opportunity to scrutinise APRA and ASIC on their performance and operation,” committee chair and Liberal MP Tim Wilson said.

“The COVID-19 pandemic has created unprecedented disruption and uncertainty in the financial sector.

“Now, more than ever, it is essential to maintain strong prudential regulation and ensure fair and transparent dealings to safeguard financial stability and consumer trust in the financial sector.”

The regulators will also be questioned over the ongoing execution of their primary responsibilities, particularly ASIC’s oversight of the self-managed super fund (SMSF) industry.

“The committee will scrutinise APRA on how it promotes financial stability through the prudential regulation and supervision of ADIs, insurers and superannuation licensees and will scrutinise ASIC on its enforcement strategy and supervisory approach,” Mr Wilson added.

“ASIC’s capability is of particular interest after recent data exposed errors in their SMSF fact sheet that should have been identified with basic critical reasoning.”

ASIC also recently appeared before the Senate parliamentary joint committee, corporations and financial services, during which chair James Shipton was questioned over the regulator’s handling of its responsible lending case against Westpac, commonly referred to as the “wagyu and shiraz” case.

The corporate regulator has since announced that it would not appeal the Full Federal Court’s 2-1 decision to uphold Justice Nye Perram’s dismissal of its responsible lending case.

However, the regulator has revealed that in light of the Full Federal Court’s decision, it will now review its updated regulatory guidance (RG 209) and consider the implications of the Federal Court’s decision on compliance practices.

[Related: ASIC to review responsible lending guidance]