The Australian Prudential Regulation Authority (APRA) today announced the terms of reference for reviewing its enforcement strategy.

The regulator announced plans for a review last month, after the Hayne royal commission questioned why APRA isn’t using its court-based sanction powers.

Deputy Chairman John Lonsdale will lead the review, which he says will be “a forward-looking examination of APRA’s approach to the use of its enforcement powers to ensure that financial promises made by supervised institutions are met within a stable, efficient and competitive financial system”.

“APRA has taken a range of supervisory actions over many years, but it is timely to examine whether APRA’s traditional approach – prioritising prevention and rectification – can be augmented by greater enforcement activity.

“This review presents an opportunity for APRA to strengthen further its supervisory toolkit and reinforce sound prudential outcomes.”

APRA’s approach to breach reporting and whistleblowers, its process for identifying enforcement actions and the adequacy of existing framework are among the issues to be examined.

The final review report will be presented to APRA members by March 31.