Background
On 28 August 2023, the Australian Securities and Investments Commission (“ASIC”) released its 2023-2027 corporate plan (with a focus on 2023-2024). On 29 August 2023, the Australian Prudential, and Regulatory Authority (“APRA”) released its 2023-2024 corporate plan.
APRA’s Corporate Plan Update
The APRA Corporate Plan strategies have been shaped by recent global events, most notably, the March 2023 collapse of Silicon Valley Bank and the takeover of Credit Suisse amongst others. APRA aims to achieve its corporate plans through a renewed emphasis on policy development, risk-based supervision, enforcement, and resolution.
APRA has outlined that it will adopt a “risk-based and forward-looking approach to supervision”, with a focus on the following areas…
- System-wide risks: This will include a cross-industry test of frameworks to better understand how financial shocks may be mitigated or propagated. Additionally, it will entail employing macroprudential tools to reduce risks to financial stability at a system-wide level.
- Operational resilience: APRA plans to act on breaches to Prudential Standard CPS 234 Information Security (“CPS 234”). They will ensure that regulated entities actively address any compliance issues related to CPS 234. Further, APRA will intensify their data-driven oversight and focus on pre-emptive measures in this regard.
- Climate-related financial risks: In working closely with international and domestic peers, APRA aims to conduct a Climate Vulnerability Assessment on the accessibility and affordability of general insurance. APRA also aims to integrate climate risk considerations into their Supervision Risk and Intensity model and make use of both existing and newly collected data to better understand and address climate-related risks.
ASIC’s Corporate Plan Update
Under the ASIC Corporate Plan, the four key strategic priorities are:
- Product design and distribution obligations: This aims to reduce the risk of harm to consumers of financial, investment and credit-like products caused by poor product design, distribution and marketing.
- Sustainable finance: This involves enforcement of current governance and disclosure standards to prevent deceptive practices such as greenwashing, while closely engaging in discussions on climate-related financial disclosure requirements.
- Retirement outcomes: This aims to protect consumers who are planning for their retirement with a focus on superannuation products, management investments and financial advice.
- Technology risks: ASIC is concerned about the impact of technology in financial markets and services. They will specifically concentrate on addressing misconduct enabled by digital tools and advancements in the financial industry.
ASIC’s strategic priorities will be implemented through its core strategic projects (as identified in last year’s Corporate Plan). These initiatives encompass addressing issues related to scams, promoting sustainable finance practices, regulating crypto-assets, ensuring compliance with design and distribution obligations, enhancing cyber and operational resilience, and adapting to the evolving landscape of digital technology and data. ASIC’s updated enforcement priorities for 2024 will be published later this year.
The corporate plans outline the primary focus areas where regulators will allocate their workforce and resources. It is essential for firms to familiarise themselves with these corporate plans to stay informed and ready for forthcoming developments. We can assist firms with establishing a framework that enables them to navigate and align with the priorities outlined in ASIC and APRA’s corporate plans.
For more information, and any guidance or advice on the ASIC and APRA Corporate Plans for 2023-2024, Cleveland & Co, your External in-house counsel, are here to help.
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