APRA Service Charter

This Service Charter sets out APRA’s commitments to its stakeholders including APRA-regulated institutions, beneficiaries¹ and the broader Australian community. Key performance indicators supporting these commitments are set out in Appendix A.

APRA’s role

APRA is the prudential supervisor and resolution authority for much of the Australian financial services sector. It oversees Australia’s authorised deposit-taking institutions (ADIs), general, life and private health insurers, reinsurers, friendly societies and most of the superannuation industry.

APRA’s purpose is to protect the Australian community by establishing and enforcing prudential standards and practices designed to ensure that, under all reasonable circumstances, financial promises made by institutions it supervises are met within a stable, efficient and competitive financial system.

APRA’s vision is to deliver a sound and resilient financial system founded on excellence in prudential supervision.

In performing and exercising its functions, APRA is required by law to balance the objectives of financial safety and efficiency, competition, contestability and competitive neutrality and, in balancing these objectives, to promote financial system stability. Further information on APRA’s approach to meeting and balancing its legislative objectives can be found here.

APRA’s values

APRA’s service commitments are guided by its core values:

Value	Commitment
Integrity	APRA will be balanced in its use of powers and honest in its dealings.
Collaboration	APRA will consult widely to produce well-founded supervisory decisions, enduring policies, and efficient outcomes.
Accountability	APRA will be open to challenge and scrutiny, and take responsibility for its actions.
Respect	APRA will be respectful of stakeholders and their opinions, ideas and needs.
Excellence	APRA will maintain high standards of quality and professionalism in all that it does, and deliver on its commitments and mandate.

Transparency and accountability

APRA has been granted a high degree of operational independence by the Australian Parliament. APRA therefore seeks, where possible, to be transparent about its activities. APRA achieves this through regular external communications on its role, key decisions and regulatory outcomes. This transparency is critical in APRA being held accountable for the outcomes it achieves.

APRA’s Corporate Plan highlights key strategic objectives and priorities over a rolling four-year period. The Corporate Plan is reviewed each year to ensure it remains responsive to changes in APRA’s operating environment.

APRA’s performance against, and approach to, its mandate and strategic objectives is measured and communicated through a number of channels. These include: regular engagement with, and an Annual Report to, the Australian Parliament; corporate publications and media releases; a Statement of Intent that responds to the Government’s Statement of Expectations; engagement with the Financial Regulator Assessment Authority; and engagement with the International Monetary Fund’s Financial Sector Assessment Program. APRA also regularly surveys regulated entities regarding APRA’s performance.

APRA’s core functions

APRA’s core functions of policy, supervision and resolution provide the foundation for delivering on APRA’s mandate and determine the types of interactions APRA has with its stakeholders.

Policy

APRA’s policy function protects the Australian community by establishing forward-looking and enduring principles-based minimum expectations for regulated institutions, and empowering APRA’s supervisors to achieve desired outcomes.

Policy activity	Commitment
Policy agenda	APRA will announce its policy priorities at the beginning of each calendar year to give all stakeholders a forward view of APRA’s planned changes to the prudential framework.
Policy development and implementation	APRA will consult with industry and other stakeholders on proposed policies in accordance with Government expectations, including the requirements of the Office of Best Practice Regulation (OBPR). APRA will provide a reasonable timeframe for comment that is commensurate with the complexity and urgency of the policy proposals, before implementation. APRA will publish on its website all non-confidential stakeholder submissions and APRA’s response to stakeholder submissions. APRA will assess the potential regulatory costs, benefits and impacts of proposed regulatory changes to all stakeholders in accordance with OBPR requirements.
Reviewing prudential standards	APRA will undertake a program of regular policy reviews to ensure that the prudential framework remains fit for purpose to protect the financial interests of the Australian community and ensure stability of the financial system. APRA will seek to ensure that material revisions to prudential standards generally occur no more than every five years.

Supervision

APRA’s supervision function protects the Australian community by identifying and responding to significant risks to regulated institutions and the financial system in a timely and effective manner.

Supervision activity	Commitment
Supervision agenda	APRA will announce its supervision agenda at the beginning of each calendar year to outline to all stakeholders how its supervision function will be directed towards significant risks within the financial system.
Supervision approach	APRA seeks to ensure consistency in its supervisory approach so as to avoid placing undue burden on regulated institutions.
Confidentiality	In accordance with its obligations under the APRA Act, APRA will treat dealings with regulated institutions confidentially.
Prudential review	APRA will provide reasonable notice to a regulated institution before commencing a prudential review. APRA will communicate the outcomes of a prudential review to a regulated institution in a closing meeting. APRA will provide the outcomes of the review in writing within 20 business days of the closing meeting.
Reporting requirements	APRA will publicly consult on, and provide reasonable timeframes for, substantial changes to the data it collects. APRA will consult on proposals to make specified data non-confidential. APRA will avoid duplication when collecting data to minimise regulated institutions’ efforts and compliance costs. APRA will acknowledge receipt of a reporting requirement query from regulated institutions, and respond within 5 business days of receipt. APRA will provide a substantive response in time for the next reporting period.
Licensing applications	APRA will make a licence decision in accordance with statutory timeframes and, for all other applications, within 3 months of receiving a substantially complete application*.
Capital instrument approvals	APRA will provide an initial response within 25 business days of receiving a substantially complete application. APRA will confirm capital eligibility of an instrument or programme within 60 business days of initial submission of a substantially complete application.
Internal model accreditation under IRB approach to capital adequacy	APRA will make an IRB accreditation decision within 9 months of receiving a substantially complete application*.

*Refer to Appendix A for information about substantially complete applications for licensing, capital instrument approvals and IRB accreditation.

Resolution

APRA’s resolution function protects the Australian community from financial loss and financial system disruption by planning for and implementing prompt and effective responses to the failure or likely failure of regulated institutions.

Resolution activity	Commitment
Resolution	APRA will effectively oversee an orderly exit or manage the resolution of failed regulated institutions in such a way that protects beneficiaries and minimises disruption to the critical economic functions and services that the institution provides to the Australian community.
Administration of the FCS	In the event that the FCS is activated by the Government following the failure of an entity covered under the scheme, APRA will: return eligible deposits of up to a total of $250,000 per account holder to customers of ADIs, or enable them to access payments; and determine through a claims assessment process the validity of each insurance claim and the amount payable, and make payments to eligible policyholders and claimants of general insurers, with claims over $5,000 subject to additional eligibility criteria.

Resolution activity

Commitment

Resolution

APRA will effectively oversee an orderly exit or manage the resolution of failed regulated institutions in such a way that protects beneficiaries and minimises disruption to the critical economic functions and services that the institution provides to the Australian community.

Administration of the FCS

In the event that the FCS is activated by the Government following the failure of an entity covered under the scheme, APRA will:

return eligible deposits of up to a total of $250,000 per account holder to customers of ADIs, or enable them to access payments; and
determine through a claims assessment process the validity of each insurance claim and the amount payable, and make payments to eligible policyholders and claimants of general insurers, with claims over $5,000 subject to additional eligibility criteria.

Feedback and public enquiries

APRA is not a complaints handling body and cannot give legal or financial advice. As such, APRA is unable to intervene in individual disputes with financial institutions. However, APRA accepts feedback and information, including whistleblower or public interest disclosures, that may assist APRA to carry out its regulatory function in a more effective and efficient manner.

For public enquiries, APRA will action all public enquiries within 15 business days of receipt, depending on the nature of the enquiry.

Appendix A: Key Performance Indicators

APRA commits to meeting the following key performance indicators (KPIs). Where this cannot be done, APRA will take every effort to discuss the reasons for any delay and provide an alternative solution. APRA’s aggregated annual performance against the KPIs will be reported in its Annual Report.

Function	Commitment	Target
Policy	APRA will meet all requirements of the Office of Best Practice Regulation (OBPR) when consulting on proposed changes to the prudential framework.	100%
Supervision	APRA will provide regulated entities with the outcomes of a prudential review in writing within 20 business days of the review’s closing meeting.	>75%
	APRA will acknowledge receipt of a reporting requirement query as soon as possible within 5 business days and will provide a substantive response in time for the next reporting period.	100%
	APRA will make a licence decision in accordance with statutory timeframes and, for all other applications, within 3 months of receiving a substantially complete application².	>75%
	APRA will provide an initial response to a capital instrument submission within 25 business days of receiving a substantially complete application³.	>75%
	APRA will confirm the capital eligibility of an instrument or programme within 60 business days of receiving a substantially complete application.	>75%
	APRA will make an IRB accreditation decision within 9 months of receiving a substantially complete application⁴.	>75%
Resolution	APRA will return all eligible deposits at ADIs declared under the FCS, up to a total of $250,000 per account holder, and for non-complex accounts, will do so within seven calendar days⁵.	100%

Footnotes:

¹ In this Service Charter, ‘beneficiaries’ refers to bank depositors, insurance policyholders and superannuation fund members.

² An application is determined to be substantially complete once an applicant has demonstrated it has sufficient financial and non-financial resources and has submitted all of the expected supporting material, which is of sufficient quality and detail to allow APRA to complete its assessment. Further information is available here.

³ A substantially complete application for a programme review or standalone issue must contain the following documents: terms & conditions, including a pricing supplement (if applicable); Prospectus/Information Memorandum; meeting provisions; legal/tax/accounting opinions; entity self-assessment.

⁴ A substantially complete application must contain the following documents: scope of the IRB application; IRB rollout plan (where applicable); APS 113 self-assessment; development documentation for rating systems and risk estimates; validation documentation for material rating systems and risk estimates; evidence of compliance with use and experience requirements; independent sign-off on data management practices and data quality; Board sign-off on the IRB application; IRRBB application (where applicable).

⁵ Non-complex deposits are protected accounts where sufficient data/permissions exist to enable payment to be made in the initial FCS payment files.