APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia. ARS 115.0 includes Reporting Form ARF 115.0 and the associated instructions and it applies for reporting periods ending on or after January 01, 2023. As announced in March 2020, APRA has moved the implementation date of APS 115 for all authorized deposit-taking institutions to January 01, 2023, to align with the Basel Committee’s decision to delay the international start date of the Basel III standards. Institutions that have the APRA approval to use an advanced measurement approach for operational risk under APS 115 as at December 31, 2021 may adopt the standardized approach from January 01, 2022, or otherwise continue to comply with existing reporting until January 01, 2023. Later in 2021, APRA expects to release the frequently asked questions (FAQs) on ARS 115.0.
In response to the feedback received during the consultation process, APRA has added an item requiring authorized deposit taking institutions to report on the time period covered by the audited data used to complete ARS 115.0. Institutions can submit ARS 115.0 using the most recent audited data available if current period audited financial data are not available. APRA is also increasing transparency of the authorized deposit taking institutions data it collects, consistent with wider government open-data policies. APRA will determine the data submitted for ARS 115.0 to be non-confidential 35 days after it is given to APRA. This lag has been introduced to ensure that the financial disclosures of an authorized deposit taking institution are published prior to any publication of this data by APRA.
APRA uses the information collected under this reporting standard for the purpose of prudential supervision, including assessing compliance with the prudential standard APS 115. This information may also be used by the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS). This reporting standard applies to all authorized deposit-taking institutions, except foreign authorized deposit-taking institutions, purchased payment facility providers (PPF providers), and the authorized deposit-taking institutions that satisfy the eligibility criteria for the simplified framework. An authorized deposit-taking institution to which ARS 115.0 applies must provide the required information for each quarter based on the financial year of the authorized deposit-taking institution.
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Keywords: Asia Pacific, Australia, Banking, ARS 115, Reporting, Operational Risk, Regulatory Capital, Basel, APS 115, ARF 115, APRA
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