SYDNEY, June 16 -- Australian Prudential Regulation Authority issued the following media release:

The Australian Prudential Regulation Authority (APRA) has commenced the final phase of its governance review by setting out updated requirements designed to strengthen governance across banking, superannuation and insurance.

APRA's requirements around governance and fitness and propriety aim to ensure its regulated entities are governed by leaders with the skills, experience and character needed for today's challenging risk environment.

APRA began consulting on proposals to modernise its governance requirements in March last year before refining some of its proposals last October. Having engaged extensively with industry, APRA has today published a response to industry feedback as well as an updated draft of CPS 510 Governance for further consultation.

The new CPS 510 is designed to reflect contemporary best practice, establish clear benchmarks and address existing areas of poor practice by:

* strengthening requirements for board governance, conflicts management and the fitness and propriety of directors and executives;* removing duplicative fit and proper reporting now that Financial Accountability Regime reporting is in place. These changes would mean forms are no longer required to be submitted for 6000 individuals;* improving flexibility by enabling boards to delegate APRA's board requirements in other prudential standards, and by aligning governance requirements with other codes and regimes where appropriate; and* harmonising requirements by combining five existing prudential standards into one and setting consistent governance minimums for all APRA-regulated entities.

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."

APRA will consult until the end of August and is inviting feedback on the draft CPS 510, the proposed removal of routine fit and proper reporting, and related definitional changes in Prudential Standard CPS 001 Defined terms.

Feedback from consultation and stakeholder meetings will inform the final standard and related guidance, planned for release in late 2026. APRA expects the new requirements to take effect from early 2028.

The consultation package is available on APRA's website at: Proposed changes to governance

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