Featured Product

    APRA Proposes Updates to Related Parties Framework for Banks

    July 02, 2018

    APRA proposed changes to the requirements for authorized deposit-taking institutions in managing risks from associations with related parties. The consultation outlines revisions to the Prudential Standard APS 222 Associations with Related Entities and the associated reporting standard ARS 222.0 Exposures to Related Entities. Comments period for the proposed revisions will expire on September 28, 2018 and the framework is expected to be finalized and implemented from January 01, 2020.

    The prospective changes seek to update and, where possible, streamline long-standing requirements and ensure that APS 222 aligns with last year’s changes to the Prudential Standard APS 221 Large Exposures (for exposures to unrelated parties of an authorized deposit-taking institution) and the changed operating environment. Deficiencies in governance and internal controls in relation to related party dealings can lead to financial or reputational damage in one business affecting other parts of the business. The APRA proposals to modernize the framework include:

    • Broadening the definition of related entities to include substantial shareholders, individual board directors, and other related individuals
    • Explicitly addressing "step-in risk" by incorporating guidance from BCBS
    • Tightening certain limits on exposure to related entities, in line with limits on exposures to unrelated entities in the revised APS 221 
    • Removing the ability for certain overseas subsidiaries to be consolidated with the standalone authorized deposit-taking institutions for prudential purposes
    • Updating the existing reporting requirements to align with the changes to the framework

     

    Related Links

    Comment Due Date: September 28, 2018

    Effective Date (expected): January 01, 2020

    Keywords: Asia Pacific, Australia, Banking, Related Party Framework, APS 222, ARS 222, APRA

    Related Articles
    News

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Issues Erratum for Technical Package on Reporting Framework 3.0

    EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.

    January 14, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets

    APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for Third Quarter of 2020

    EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Finalizes Guide on Supervisory Approach to Bank Consolidation

    ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.

    January 12, 2021 WebPage Regulatory News
    News

    SRB Chair Outlines Work Priorities for 2021

    The SRB Chair Elke König published an article setting out work priorities for 2021.

    January 11, 2021 WebPage Regulatory News
    News

    FDIC Selects Companies to Compete in Final Phase of Tech Sprint

    FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.

    January 11, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6417