APRA Revokes License of 86400 Ltd, Updates FAQs on Capital & Liquidity
The Australian Prudential Regulation Authority (APRA) revoked the authorized deposit-taking institution license of 86 400 Ltd, under the Banking Act 1959. This determination follows the acquisition of 86 400 Ltd by the National Australia Bank Limited in May 2021 and the subsequent transfer of banking assets and liabilities of 86 400 to the National Australia Bank Limited. APRA also published an updated set of frequently asked questions (FAQs) on the measurement of capital and management of liquidity risk for the authorized deposit-taking institutions.
The FAQs for authorized deposit-taking institutions are intended to assist institutions in complying with APS 111, the prudential standard on measurement of capital. APS 111 on the measurement of capital for the authorized deposit-taking institutions sets out the characteristics that an instrument must have to qualify as regulatory capital and the various regulatory adjustments to be made to determine total regulatory capital on both a Level 1 and Level 2 basis. The updates pertain to the version of APS 111, which commences on January 01, 2022. APS 111 does not apply to a foreign authorized deposit-taking institution, which must, however, be subject to comparable capital adequacy standards in its home country, or a purchased payment facility provider.
The FAQs on liquidity risk management relate to APS 210, the prudential standard on liquidity and ARS 210.0, the reporting standard on liquidity. The new FAQs and updates to the existing FAQs published clarify the liquidity treatment of certain types of deposits—specifically, the treatment of intermediated deposits, personal investment entity deposits, and deposits from government or governmental entities under APS 210 and ARS 210.0. APS 210 requires an authorized deposit-taking institution to adopt prudent practices in managing its liquidity risks and to maintain an adequate level of liquidity to meet its obligations as they fall due across a wide range of operating circumstances. ARS 210.0 is a reporting standard that sets out requirements for the provision of information related to liquidity and funding of an authorized deposit-taking institution; it includes reporting forms and associated instructions and should be read in conjunction with APS 210.
Related Links
- Press Release on Bank License
- Press Release on Capital FAQ
- Updated FAQ on Capital Requirements
- Press Release on Liquidity FAQ
- Updated FAQ on Liquidity Requirements
- Prudential and Reporting Standards
Keywords: Asia Pacific, Australia, Banking, 86400 Ltd, Bank Licenses, Basel, Regulatory Capital, APS 111, FAQ, National Australia Bank, Liquidity Risk, APS 210, ARS 210.0, APRA
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