In November 2021, APRA released final prudential standards and guidance that accompany the ADI capital reforms, together with final prudential practice guides in July 2022. In the July 2022 release, APRA consulted on two proposals put forward for consequential amendments to be made to the capital frameworks. The proposals were encouraged to ensure consistency with APRA’s broader prudential framework and capital reforms. The subjects of these proposals were the treatment of exposures to New Zealand and the net stable funding ratio (NSFR) requirement.
As part of this consultation process, APRA received three industry submissions. Following consideration, APRA determined that the proposed amendments remain appropriate and do not require further adjustment, in light of the information contained within those submissions.
As previously foreshadowed by APRA, there were also various minor consequential amendments implemented. These new amendments have been made in relation to cross-referencing in the ADI prudential framework, rather than making modifications to the ‘unquestionably strong’ levels of capital that are compliant with the Basel III requirements.
Below is a list of the 11 prudential standards and two practice guides that have been amended by APRA:
In addition to the above amendments, APRA has modified the applicable reporting standards to reflect the consequential amendments. Below is a list of the six updated reporting standards:
From 1 January 2023, APRA’s amendments will take effect. APRA requests industry feedback on the new proposed revisions by 1 March 2023.
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Matthew Bode, Partner
Munkh-Erdene Saruul, Paralegal