ON JULY 1, the sun will set on the body regulating state-based building societies and credit unions, the Australian Financial Institutions Commission.
On that date the states and territories will transfer responsibilities for supervision and corporate regulation under the Financial Institutions Scheme to two federal agencies – the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
The transfer of powers is the final leg of the implementation of the regulatory restructure recommended by the Wallis Inquiry in 1997.
The Financial Insitutions Scheme was introduced in 1992 with much industry foreboding.
However, now a number of senior industry players concede that, without the scheme to create national arrangements and put the industry on a strong prudential footing, the 1990s might not have been so bright.
AFIC executive director Mike Moreland believes the establishment of AFIC, its tough prudential standards, onsite inspection and data analysis was a revolution in Australian prudential regulation.
“For building societies and credit unions the transfer to the APRA is more of an evolution,” Mr Moreland said.
