May 22, 2019

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR). These reporting standards are ARS 112.2, ARS 118.1, and ARS 180.0. The reporting standards have been updated in response to amendments to the Banking Act 1959 (Banking Act), which ease restrictions on the use of the term “bank.” These reporting standards will commence on July 01, 2019.

The updated reporting standards include the following:

  • Reporting Standard ARS 112.2 Standardized Credit Risk: Off-balance Sheet Exposures (including Reporting Form ARF 112.2A)
  • Reporting Standard ARS 118.1 Other Off-balance Sheet Exposures (including ARF 118.1)
  • Reporting Standard ARS 180.0 Counterparty Credit Risk (including Reporting Forms ARF 180.1, ARF 180.2, and ARF 226.0)

The Department of Treasury, in July 2017, consulted on amendments to section 66 of the Banking Act and these amendments were designed to reduce regulatory barriers to entry for new and innovative entrants to the banking system. The amendments were later introduced by the Treasury Laws Amendment (Banking Measures No. 1) Bill 2017, which received Royal Assent and commenced on March 05, 2018. These amendments allow any authorized deposit-taking institution to use the term “bank” in relation to the authorized deposit-taking institution's financial business unless APRA makes a "determination" under subsection 66AA(3) of the Banking Act. Two of the reporting standards currently use the term “bank” to specify units of measurement used on forms.

The amendments to the Banking Act mean that, to ensure that data collected remains fit for purpose, a new method of categorizing entities is needed. The standard wording in each of the three reporting standards has been updated to align it with the current practice. The operation of each reporting standard outside these areas remains unchanged. The data items required, their definition, the applicable entities, and the due dates have not changed.

 

Related Links

Effective Date: July 01, 2019

Keywords: Asia Pacific, Australia, Banking, CCR, SA-CCR, Capital Adequacy, Reporting, ARF 226, ARF 180, ARF 112.2A, ARF 118.1, APRA

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