Independent Review – Australian Prudential Regulation Authority
On 27 August 2021, the Australian Prudential Regulation Authority (APRA) announced a revised prudential standard for remuneration, CPS 511.
The new prudential standard for remuneration lifts minimum standards of practice by enhancing board oversight, increasing the use of non-financial measures in remuneration design and ensuring there are appropriate financial consequences for poor risk management. The standard takes a risk-based and proportionate approach with more comprehensive requirements for larger and more complex regulated entities.
Consistent with the Government’s Regulation Impact Statement (RIS) requirements, the discussion paper, response paper and impact analysis have been certified by APRA as meeting the requirements of a RIS. The Office of Best Practice Regulation (OBPR) does not assess the quality of independent reviews and RIS-like documents used in lieu of a RIS, but does assess whether the options analysed in the independent review are relevant to the regulatory proposal. The OBPR assessed that the options analysed in the discussion and response papers are sufficiently relevant to the regulatory proposal.
The agency estimates the average annual regulatory costs at $38 million.