Featured Product

    APRA Consults on Reporting Standard for Credit Risk Management

    October 28, 2020

    APRA is consulting on the reporting standard for credit risk management (ARS 220.0). APRA is seeking feedback on the design of the proposed credit risk data collection, including items that authorized deposit-taking institutions consider to be challenging to report or would require additional time to implement. APRA is consulting on the instructions included in the draft reporting standard, the proposed implementation timeline, and appropriate entity-level aggregates from ARS 220.0 data, which could be declared non-confidential. APRA also seeks feedback on the feasibility of authorized deposit-taking institutions reporting a pro-rata allocation to individual financial instruments of provisions that have been raised on a portfolio basis. The feedback period ends on January 28, 2021 while the proposed standard is expected to commence on January 01, 2022.

    APRA intends to remove a number of items from the current reporting forms, including detail on interest income and certain breakdowns of impaired and past due items. APRA proposes to remove the requirement for authorized deposit-taking institutions to categorize their prescribed provisioning exposures into separate time buckets. APRA acknowledges that collecting provisions allocated on a portfolio basis at a detailed level, as is proposed in the draft reporting standard, introduces complexity into the collection. Accordingly, APRA is seeking industry feedback on ways that provisions could be reported at a financial instrument level, for example, on a pro-rata basis.

    APRA is proposing a risk-based approach to reporting based on the complexity of the authorized deposit-taking institution wherein less sophisticated authorized deposit-taking institutions have reduced reporting requirements. The proportionate approach seeks to balance burden with the supervisor requirements. APRA seeks further feedback on potential enhancements to this approach. The data collected by ARS 220.0 will form the basis of an authorized deposit-taking institution financial instrument data model, which will be extended at a future date to include topics such as capital adequacy for credit risk, among other areas of interest. In keeping with the APRA approach to data, the ARS 220.0 data model uses a financial instrument level concept-dimension model. Compared with the existing collection, the draft ARS 220.0 will collect more detailed data on credit exposures and provisions of authorized deposit-taking institutions. 

    APRA proposed to update ARS 220.0 to align it with the final version of prudential standard on credit risk management (APS 220) released in December 2019. To align with the commencement of the new APS 220, APRA proposes the first reporting period for the new data collection to be for quarter ending March 31, 2022. The proposed implementation of ARS 220.0 will coincide with the start of the new data collection solution APRA Connect. APRA intends to consult further on determining ARS 220.0 data to be non-confidential for the purposes of section 56 of the APRA Act at a later date. In the interim, APRA is seeking feedback on how appropriate aggregations could address industry concerns with a view to including them as part of the upcoming consultation. Once finalized, the draft ARS 220.0 is intended to replace the current reporting standards on impaired facilities (ARS 220.0), on prescribed provisioning (ARS 220.3), and on movements in provisions for impairment (ARS 220.5). 


    Related Links

    Comment Due Date: January 28, 2021

    Effective Date: January 01, 2022

    Keywords: Asia Pacific, Australia, Banking, Credit Risk, Proportionality, Regulatory Capital, Reporting, ARS 220, APS 220, Basel, APRA

    Featured Experts
    Related Articles

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267