Featured Product

    APRA Consults on Prudential Standard for Operational Risk

    July 28, 2022

    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. APRA also issued a letter and finalized the minor amendments to align and centralize the definition of a significant financial institution within the prudential framework, along with the associated prudential standards. APRA will continue to explore the scope for enhancing proportionality in the prudential framework and publish a list of significant financial institutions for all industries on its website in late 2022. In another statement, APRA announced that the neobank Volt Bank has successfully completed the process of returning deposits to its customers, post its June 29 decision to cease being a bank and hand back its authorized deposit-taking institution license to APRA.

    The proposed prudential standard CPS 230 sets out minimum standards for operational risk controls and monitoring, business continuity planning, and the management of third-party service providers. The proposed standard will replace and supersede five existing standards: CPS 231 on outsourcing, CPS 232 on business continuity management applicable to authorized deposit-taking institutions, life insurers and general insurers, the equivalent standards SPS 231 on outsourcing and SPS 232 on business continuity management for superannuation entities, and the HPS 231 on outsourcing for private health insurers. The proposed standard ensures that an APRA-regulated entity must effectively manage its operational risks, maintain its critical operations through disruptions, and manage the risks arising from service providers. The proposed standard aims to:

    • strengthen operational risk management with new requirements to address weaknesses that have been identified in the existing practices of APRA-regulated entities.
    • improve business continuity planning to ensure that regulated entities are ready to respond to severe business disruptions, and maintain critical operations such as payments, settlements, fund administration and claims processing.
    • enhance third-party risk management by extending requirements to cover all material service providers that regulated entities rely upon for critical operations or that expose them to material operational risk.

     APRA expects to release the final CPS 230 early next year, which is well before the new standard comes into force from January 01, 2024.

     

    Related Links

     

    Keywords: Asia Pacific, Australia, Banking, Operational Risk, CPS 230, Outsourcing, Third-Party Risk, Significant Financial Institutions, Volt Bank, Regtech, Basel, Operational Resilience, APRA

    Featured Experts
    Related Articles
    News

    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
    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
    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
    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
    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
    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
    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
    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
    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
    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