What is APRA?
APRA stands for Australian Prudential Regulation Authority – A regulatory body that sets requirements for companies operating in Australia to ensure the safety and stability of the financial system.
In March 2004, APRA issued a consultation paper on proposed Fit and Proper reforms regarding Responsible Persons. A Responsible Person is defined by APRA based on the responsibilities and activities of the role and is generally an individual who is “responsible for the management and oversight of a regulated institution/RSE Licensee’s business operations”. Depending on the type of institution, a Responsible Person may hold a position as director, secretary, senior manager, appointed auditor, appointed actuary or other role where the activities undertaken as part of that role “may materially affect the whole, or a substantial part, of the business of the regulated institution or its financial standing”. It should be noted that individuals who are not employees of a regulated institution can also be Responsible Persons if they hold such a role.
More information on APRA – https://www.apra.gov.au/
Source of logo: APRA site
Some of the key requirements that APRA imposes on companies include:
- Prudential standards: APRA sets a range of prudential standards that companies must comply with, covering areas such as capital adequacy, risk management, and governance.
- Licensing: Certain types of financial services companies, such as banks, insurers, and superannuation funds, are required to hold a license from APRA in order to operate in Australia. The licensing process involves meeting certain requirements related to financial stability, risk management, and governance.
- Reporting: Companies regulated by APRA are required to provide regular reporting to the regulator, including financial reports, risk management reports, and compliance reports.
- Conduct and culture: APRA places a strong emphasis on ensuring that companies operate with the appropriate conduct and culture, including treating customers fairly, maintaining high ethical standards, and promoting a culture of compliance and risk management.
- Cybersecurity: With the increasing importance of technology in financial services, APRA has also placed a greater emphasis on cybersecurity, requiring companies to have appropriate measures in place to protect against cyber threats.
- It’s important to note that APRA requirements may vary depending on the specific type of company and the activities they are engaged in. Companies should consult with APRA or seek professional advice to ensure that they are meeting all relevant requirements.
What is the relevance for Background Checks?
In order to become an APRA-regulated entity in Australia, there are several background checks that may be required, depending on the type of entity and the role of the individual:
Police Checks: APRA may require police checks for individuals who will be in positions of responsibility or trust within an APRA-regulated entity. These checks will typically involve a national criminal history check to ensure that the individual has not been convicted of any serious offences.
Aspects assessed – Honesty, Integrity and Judgement
Avvanz provides AFP Checks and more information can be found in this screenshot – Source: https://www.avvanz.com/screenglobal/ (Avvanz’s multi-award winning Background Checking platform)
This check obtains information directly from the Australian Federal Police and will reveal any disclosable court outcomes and pending charges as recorded by all Australian Police Service databases and in conjunction with spend convictions legislation.
Turn-Around Time is +/- 18 business days.
Documents needed:
- Completely filled AFP(Australian Federal Police) Form
- Additional guides such as the ‘100 points identification’ system are included in the AFP Form to check if the IDs provided by the candidate comply with the criminal check requirement (as one ID will not suffer entirely) and a guide can be found at the end of the document to serve as an aid in filling out the code number field(top left box in AFP Application Form)
Other options available for which you need to select in the subchecks if you want to add them:
- Banned Persons Check
Avvanz offers International Criminal Checks covering 100+ countries as well.
Financial Checks: APRA may also conduct financial checks to ensure that the entity or individual has the financial capacity to meet its obligations. This may include a review of the entity’s financial statements, credit history, and other financial information.
Aspects assessed – Not insolvent
Avvanz offers Credit Check, Financial Regulatory Check and Bankruptcy Checks in Australia. You can obtain detailed information on Scope, Source, Turnaround Time, Cost from ScreenGlobal or you can write to consult@avvanz.com. Similarly for the below APRA related checks recommendations:
Conflicting Directorship: This is to ensure no conflict of interest, or where one exists, it should not pose a risk.
Aspects assessed – No conflict of interest
Avvanz searches for past and present directorships and possibly any disqualification from directorship.
Qualifications and Experience: APRA may also require individuals to provide evidence of their qualifications and experience, particularly for senior management and board positions. This may include a review of the individual’s education and work history, as well as any relevant professional qualifications.
Aspects assessed – Skills & Qualifications, Competence
Reference Checks (Avvanz calls it Employment Performance Checks): APRA may conduct reference checks to verify an individual’s employment history and character. This may involve contacting previous employers or referees to confirm details of the individual’s employment history and to seek feedback on their performance and character.
Aspects assessed – Honesty, Integrity and Judgement
Legal Right To Work and Identity Checks – To check if resident in Australia.
Aspects assessed – Residency in Australia
It’s worth noting that the specific background checks required by APRA will depend on the type of entity and the role of the individual. APRA may also conduct ongoing monitoring of entities and individuals to ensure ongoing compliance with regulatory requirements.
For more detailed information or a non-obligatory chat, drop us a note at consult@avvanz.com.