Regulation
Australia's banking regulation is extensive and detailed. It is split mainly between the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investment Commission (ASIC).
APRA is responsible for the licensing and prudential supervision of Authorised Deposit-Taking Institution (ADIs) (banks, building societies, credit unions, friendly societies and participants in certain credit card schemes and certain purchaser payment facilities), life and general insurance companies and superannuation funds. APRA has issued capital adequacy guidelines for banks which are consistent with the Basel II guidelines. All financial institutions regulated regulated by APRA are required to report on a periodic basis to APRA. Certain financial intermediaries, such as investment banks (which do not otherwise operate as ADIs) are neither licensed nor regulated under the Banking Act and are not subject to the prudential supervision of APRA. They may be required to obtain licences under the Corporations Act 2001 or other Commonwealth or State legislation, depending on the nature of their business activities in Australia.
ASIC has responsibility for market integrity and consumer protection and the regulation of certain financial institutions (including investment banks and finance companies). However, ASIC does not actually investigate any issues or propose any regulations that concern consumer protection.
Banks are also subject to obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2008 as "reporting entities". They are required to identify and monitor customers using a risk-based approach, develop and maintain a compliance program, report suspicious matters and certain cash transactions and file annual compliance reports. The Australian Transaction Reports and Analysis Centre (AUSTRAC) has primary regulation and oversight responsibility for AML and CTF under the 2008 act.
Read more about this topic: Banking In Australia
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