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

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News
    News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News
    News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    News

    Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks

    At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.

    September 14, 2023 WebPage Regulatory News
    News

    ISSB Standards Shine Spotlight on Comparability of ESG Disclosures

    The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures

    August 22, 2023 WebPage Regulatory News
    News

    EBA Issues Several Regulatory and Reporting Updates for Banks

    The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.

    August 10, 2023 WebPage Regulatory News
    News

    BCBS Proposes to Revise Core Principles for Banking Supervision

    The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.

    August 04, 2023 WebPage Regulatory News
    News

    US Proposes Final Basel Rules, Transition Period to Start in July 2025

    The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.

    August 04, 2023 WebPage Regulatory News
    News

    FSB Report Outlines Next Steps for Climate Risk Roadmap

    The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.

    August 04, 2023 WebPage Regulatory News
    News

    EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise

    The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.

    July 31, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8931