The Australian Prudential Regulation Authority (APRA) has launched the final phase of its governance review, publishing updated draft requirements intended to raise leadership standards and reduce regulatory duplication across the financial industry.
The centrepiece of the update is a revised draft of CPS 510 Governance, which consolidates five existing prudential standards into a single framework and establishes consistent governance minimums across all APRA-regulated entities. The draft standard also strengthens requirements around board oversight, conflicts management, and the fitness and propriety of directors and senior executives.
A notable change proposed under the revised framework is the removal of routine fit and proper reporting, made possible by the introduction of the Financial Accountability Regime. If adopted, the change would eliminate the need to submit forms for approximately 6,000 individuals, substantially reducing the administrative burden on regulated entities. The draft standard also proposes greater flexibility for boards to delegate compliance responsibilities related to other prudential standards, and seeks to align governance requirements more closely with existing codes and regimes.
APRA is a statutory authority responsible for prudentially supervising institutions across the banking, insurance and superannuation industries in Australia, with the aim of protecting the financial interests of depositors, policyholders and superannuation fund members.
The regulator began consulting on proposed governance reforms in March last year, before refining several proposals in October. Having completed extensive industry engagement, APRA has now published its response to that feedback alongside the updated draft standard, with a further consultation period running until the end of August. The final standard and accompanying guidance are expected to be released in late 2026, with the new requirements anticipated to take effect from early 2028.
APRA chair John Lonsdale said the new requirements will raise expectations for boards and senior leaders, while also freeing them up to focus on the matters most essential to financial and operational resilience.
“Strong governance is fundamental to the safety, resilience and performance of banks, insurers and super funds. Over a long period of time, APRA has observed that problems at our regulated entities can be frequently traced to poor oversight, unclear accountability or weak challenge,” Mr Lonsdale said.
“At a time of rising economic and geopolitical uncertainty, and where new technologies are rapidly changing financial services, our regulated entities need leaders who can respond decisively and effectively to financial stress and operational disruptions.
“Alongside lifting expectations, we’ve sought to strike the right balance between safety and efficiency. In allowing boards more freedom to delegate lower value compliance matters and reducing reporting, our goal is to ensure boards have capacity to direct their attention to the issues of most importance.”
Copyright © 2026 RegTech Analyst
Copyright © 2018 RegTech Analyst
