APRA canvasses being given sanctions power

The Australian Prudential Regulation Authority has canvassed with the Government an extension of its powers to allow it to impose sanctions in the same manner as some overseas financial regulators.

APRA’s chair, John Lonsdale has raised the possibility of a sanctions power in a letter to the Treasurer, Jim Chalmers and the Minister for Financial Services, Katy Gallagher, arguing that such a regime would be more efficient than pursuing action for court-imposed penalties.

“Our powers to seek penalties for wrongdoing are an important tool in our toolkit. However, there are cases where the time and resource burden on the party being investigated is disproportionate, such as where court action is the only option,” Lonsdale’s letter said.

“For offences of an administrative nature and where regulatory findings are agreed to, it would be more efficient for APRA to issue a sanction, as is the case for APRA’s overseas peers.”

“Over coming months, we will examine this further and provide Treasury with suggested options for streamlining enforcement actions, such as extending existing infringement notice provisions,” his letter said.

The United Kingdom’s Financial Conduct Authority (FCA) has a sanctions power which, if emulated in Australia could see APRA having the ability to impose fines on regulated entities such as banks, insurers and superannuation funds.

As recently as October last year the UK’s FCA imposed a £29 million penalty on Starling Bank Limited over serious weaknesses in its anti-money laundering and sanctions controls detected during a compliance sweep.

Similarly, in Canada, the Alberta Securities Commission issued sanctions against those tied up in a Ponzi scheme translating to $9 million in disgorgement and penalties.