APRA’s Crisis Management Powers

Treasury is consulting on the exposure draft of Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017 (the draft Bill), which will strengthen APRA’s crisis management powers in relation to prudentially regulated authorised deposit-taking institutions (ADIs), general insurers and life insurance companies (insurers), and certain group entities.

The draft Bill includes amendments to the Banking Act 1959, Insurance Act 1973, Life Insurance Act 1995, Australian Prudential Regulation Authority Act 1998, Payment Systems and Netting Act 1998 and Financial Sector (Business Transfer and Group Restructure) Act 1999.

The first group of amendments deal with APRA’s powers relevant to the resolution of a regulated entity in distress.

These are specifically APRA’s powers in relation to:

• statutory and judicial management;
• directions powers;
• transfer powers;
• conversion and write-off of capital instruments;
• stay provisions;
• foreign branches;
• Financial Claims Scheme; and
• wind-up and other matters (Chapter 9).

The second group of amendments relate to crisis resolution planning, to provide APRA with clear powers to ensure that regulated entities are better prepared for a resolution prior to such an event arising.

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