Featured Product

    APRA Revises Prudential Standard on Capital Adequacy

    August 05, 2021

    The Australian Prudential Regulation Authority (APRA) published the final prudential standard APS 111, which sets out detailed criteria for measuring the regulatory capital of an authorized deposit-taking institution. APRA also outlined the steps taken in finalizing the revised APS 111, including an assessment of the regulatory impact. APS 111 sets out the characteristics that an instrument must have to qualify as "regulatory capital" for an authorized deposit-taking institution and the various regulatory adjustments to be made to determine the total regulatory capital. APRA also published its response to the submissions received to the May 2021 consultation on APS 111. The final revised APS 111 will come into effect from January 01, 2022.

    APRA had proposed some new minor revisions to APS 111 in May 2021. These revisions clarified that Common Equity Tier 1 capital would not be permitted to have unusual features that could undermine its role as the highest quality loss-absorbing capital, in line with the approach for other capital instruments. Submissions from industry did not raise concerns regarding this proposal. However, some authorized deposit-taking institutions did request APRA to provide further clarity regarding "repackaging" arrangements and the applicability of the revised prudential standard to foreign bank branches. APRA has clarified that APS 111 does not apply to a foreign authorized deposit-taking institution. As part of APRA’s approach to licensing, APRA will typically review whether foreign institutions are subject to comparable capital requirements in their home country. The key revisions in this update of the Prudential Standard are designed to: 

    • reinforce financial system resilience, through changes to the capital treatment of an institution's equity investments in their banking and insurance subsidiaries 
    • promote simple and transparent capital issuance, through the removal of the allowance for the use of special purpose vehicles in regulatory capital issuance  
    • clarify aspects of APS 111, including provision of additional technical information to assist institutions in issuing capital instruments


    Related Links

    Effective Date: January 01, 2022

    Keywords: Asia Pacific, Australia, Banking, APS 111, Capital Adequacy, Regulatory Capital, Basel, APRA

    Featured Experts
    Related Articles

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News

    APRA Consults on Prudential Standard for Operational Risk

    The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.

    July 28, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8422