A new oversight authority for APRA and ASIC, independent of Government, should be established by legislation to assess the effectiveness of each regulator in discharging its functions and meeting its statutory objects.
The authority should be comprised of three part‑time members and staffed by a permanent secretariat.
It should be required to report to the Minister in respect of each regulator at least biennially.
The Government agrees to create an independently‑chaired oversight body to report on the performance of ASIC and APRA.
The Royal Commission noted that while regulators are subject to a number of accountability mechanisms, an independent assessment of their strategic performance against their overall mandate was lacking. Having a dedicated oversight body will allow for better assessment of the regulators’ sustained performance and improve the effectiveness of other accountability mechanisms.
The Government is committed to maintaining the independence of the financial system regulators. Accordingly, this body will not have the ability to direct, make, assess or comment on specific enforcement actions, regulatory decisions, complaints and like matters.
The Financial Sector Advisory Council will be disbanded given the establishment of this new body and consideration will be given to streamlining other accountability mechanisms.