Regulatory Reset or Incremental Relief? What APRA and ASIC’s Latest Moves Mean for Boards

Australia’s regulatory landscape is shifting; not dramatically, but meaningfully. Recent announcements from Australian Prudential Regulation Authority and Australian Securities and Investments Commission signal a recalibration in how regulators are thinking about governance, productivity, and market competitiveness.

From a Light Years Agency perspective, these changes matter less for what they remove and more for what they signal; an acknowledgement that governance effectiveness cannot be legislated into existence through volume alone.

APRA’s revised governance stance; fewer hard edges, clearer intent

APRA’s decision to soften elements of its proposed governance reforms reflects a pragmatic response to sustained feedback from boards and directors. Rather than retreating from reform, the regulator has refined its approach to focus on outcomes rather than prescriptive mechanics.

Key adjustments include extending proposed director tenure limits from 10 to 12 years, stepping away from rigid intra-group independence rules, and abandoning mandatory early engagement on senior appointments in favour of encouraged best practice. Importantly, APRA has clarified that while boards must maintain a credible, documented view of collective skills, this does not require public articulation of skills at individual director role level.

Taken together, these changes reduce unnecessary rigidity while preserving regulatory intent. For boards, this places greater responsibility back where it belongs; on judgement, documentation, and demonstrable governance discipline rather than technical compliance.

A broader issue remains unresolved. APRA-regulated entities are still subject to a significant volume of board-level obligations embedded across prudential standards. Calls from the Australian Institute of Company Directors for a roadmap to rationalise these obligations should be taken seriously.

Governance time spent reconciling overlapping requirements is time not spent on forward-looking risk, resilience, and strategic oversight.

Draft standards are expected in mid-2026, with implementation from 2028. Boards should use the intervening period to stress-test their governance frameworks against the direction of travel, not simply the letter of the current rules.

ASIC’s capital markets roadmap; governance meets competitiveness

ASIC’s newly released roadmap for Australia’s capital markets reflects a parallel theme. The regulator is explicitly linking market integrity with economic competitiveness and productivity.

Initiatives under consideration include streamlining IPO processes, revisiting dual-listing settings, reassessing disclosure thresholds, and moving away from a one-size-fits-all approach to listed entities. For boards, this signals a more nuanced regulatory posture; one that recognises differences between market segments, ownership structures, and growth trajectories.

ASIC’s willingness to engage on simplifying the Financial Accountability Regime, reassessing remuneration reporting burdens, and coordinating more closely with APRA is particularly notable. Administrative drag has real economic cost, and regulators are increasingly acknowledging that complexity can undermine, rather than strengthen, governance outcomes.

The roadmap also sharpens ASIC’s focus on private markets, particularly private credit. Heightened scrutiny around transparency, liquidity risk, and fee structures should be on the radar of boards operating in or adjacent to these markets.

What boards should take from this moment

Neither APRA nor ASIC is stepping back from governance. What is changing is the tone. There is greater recognition that effective governance depends on clarity, proportionality, and board capacity to focus on what matters most.

For boards and executives, this is not a moment for complacency. It is an opportunity to reset governance practices; to simplify where possible, strengthen judgement where necessary, and ensure that regulatory compliance supports, rather than crowds out, strategic leadership.

At Light Years Agency, our consistent view is this; future-fit governance is not about doing more. It is about doing what matters, well, and being able to evidence that judgement when regulators come calling.