Featured Product

    APRA Consults on ARS 720.1, Finalizes Licensing Approach

    August 11, 2021

    The Australian Prudential Regulation Authority (APRA), the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA) issued a letter to consult on changes to ARS 720.1, the reporting standard on ABS/RBA loans and finance leases. APRA proposed to amend ARS 720.1 to accurately align with the latest version of APS 220, the prudential standard on credit risk management that was published in December 2019. The comment period for this consultation ends on September 07, 2021 and the changes are proposed to be effective from January 01, 2022. Thus, APRA will delay implementing the November 2020 updates to ARS 720.1 until this time. In addition, APRA finalized the revised approach to licensing and supervising new authorized deposit-taking institutions, thus publishing the response paper on the proposed approach, the final information paper, and two guidelines on licensing for locally incorporated institutions and overseas banks.

    The revised approach to licensing follows a review of the existing licensing regime for the authorized deposit-taking institutions and aims to incorporate lessons learned since the launch of the restricted institution licensing pathway in 2018. Post consultation, the final position of APRA remains largely consistent with its original proposals, with the most significant clarifications relating to milestones in the progression of a license application. Under the finalized approach: 

    • Restricted institutions must achieve a limited launch of both an income-generating asset product and a deposit product before being granted a license.
    • There is increased clarity about capital requirements at different stages for new entrants, aimed at reducing volatility in capital levels and facilitating a transition to the methodology for established authorized deposit taking institutions over time.
    • New entrants are expected to have a more advanced contingency plan to respond to financial stress, including an option to execute the authorized deposit taking institution's orderly and solvent exit from banking business.

    The new approach comes into effect immediately, although much of the information package is simply a formalization of existing practice. APRA also published guidelines on licensing for locally incorporated institutions and overseas banks. These guidelines are intended to assist entities in navigating the licensing process. The guidelines outline the licensing process, the type of support and guidance applicants can expect to receive from APRA, the minimum criteria to be addressed by applicants under the restricted and direct licensing pathways, and the minimum supporting information APRA expects with applications, for applicants to demonstrate they have met the relevant prudential requirements to be granted a license. 


    Related Links

    Comment Due Date: September 07, 2021

    Keywords: Asia Pacific, Australia, Banking, ARD 720.1, APS 220, Credit Risk, Licensing Regime, Reporting, EFS, Data Collection, APRA

    Featured Experts
    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699