APRA has published its roadmap for a review of the prudential framework for groups.

APRA’s objective in reviewing the framework is to ensure that the financial safety of APRA-regulated entities within groups is maintained, and not undermined by risks inherent in group structures, new and old.

APRA says

“In recent years, there has been a marked increase in the number of applications for new non-operating holding company (NOHC) authority licences, and an increase in the level of complexity in group structures. This reflects shifts in the financial system, expansion into adjacent risk and revenue sources, the growing use of digital technologies, and the emergence of groups that cover multiple industries.”

As part of the review of the groups framework, APRA will update its guidelines for licencing new NOHC authorities.

The review will commence with a Discussion Paper in the first half of 2023 to seek industry feedback on five key topics related to groups: financial resilience, governance, risk management, resolution and competition issues. APRA expects to consult on any revisions to the relevant standards over 2023-2024, with any changes effective from 2025.

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