The Australian Prudential Regulation Authority (APRA), the prudential regulator overseeing banking, superannuation and insurance in Australia, has launched the final stage of its governance review, releasing updated requirements intended to raise standards across its regulated sectors.
The centrepiece of the update is a revised draft of CPS 510 Governance, which APRA has published alongside its formal response to industry feedback gathered during earlier consultation stages. The new standard consolidates five existing prudential standards into a single framework and introduces consistent governance minimums applicable to all APRA-regulated entities.
Among the key changes proposed under the updated CPS 510 are strengthened requirements for board governance, conflicts management, and the fitness and propriety of directors and senior executives. The draft also proposes eliminating duplicative fit and proper reporting that has been made redundant by the introduction of the Financial Accountability Regime, a move that would remove the obligation to submit forms for around 6,000 individuals. The revisions additionally seek to give boards greater flexibility by enabling delegation of certain APRA requirements set out in other prudential standards, while aligning governance obligations more closely with existing codes and regimes.
APRA first opened consultation on modernising its governance framework in March of last year, before refining a number of its proposals in October. The regulator has since engaged extensively with industry ahead of the current release.
APRA chair John Lonsdale said, “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 added, “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.”
He continued, “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.”
The current consultation period runs until the end of August, with APRA seeking feedback on the draft CPS 510, the proposed removal of routine fit and proper reporting, and associated definitional changes in Prudential Standard CPS 001 Defined Terms. A final standard and accompanying guidance are expected to be published in late 2026, with the new requirements anticipated to come into force from early 2028.
Copyright © 2026 FinTech Global
