APRA Finalizes ARS 720.1, Updates Validation and Derivation Rules
The Australian Prudential Regulation Authority (APRA) updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities. APRA also published the finalized reporting standard on ABS/RBA loans and finance leases (ARS 720.1), along with a response letter on the submissions received on proposed updates to ARS 720.1. APRA, the Australian Bureau of Statistics (ABS), and the Reserve Bank of Australia (RBA) have updated ARS 720.1 to correctly align it with the final version of APS 220, the prudential standard on credit risk management, which was released in December 2019.
The consultation on ARS 720.1 was launched in August 2021 and was open for one month. APRA received two submissions: one from an industry body and one from an authorized deposit-taking institution. Submissions were supportive of the changes and the decision to delay implementation of the new ARS 720.1 to align with the start of reporting of the interim credit risk reporting standard ARS 220.0 (Credit Quality). Both submissions also requested APRA move the commencement from January 2022 to March 2022, the first reporting period of the new ARS 220.0. To allow authorized deposit-taking institutions to align their reporting with the updated credit risk framework, APRA will delay implementation of the updates to ARS 720.1. The updated ARS 720.1 will now apply to reporting periods ending on or after March 31, 2022. APRA is of the view that delaying the commencement will provide a clean basis for authorized deposit-taking institutions to change their reporting to the new credit risk framework and provide them with more time to make this transition.
ARS 720.1 contains the reporting forms ARF 720.1A and ARF 720.1B, which collect information for use by ABS and RBA for various purposes, including the compilation of Australia’s National Accounts and the calculation of the credit aggregates. This information may also be used by APRA for prudential and publication purposes. This reporting standard is an Economic and Financial Statistics (EFS) Reporting Standard, which applies to certain authorized deposit-taking institutions and registered financial corporations.
Related Links
- Updated Validation Rules (XLSX)
- Updated Derivation Rules (XLSX)
- Overview of Validation and Derivation Rules
- News Release on ARS 720.1
- APRA Letter and Revised Standard
Keywords: Asia Pacific, Australia, Banking, ARS 720.1, RBA, Credit Risk, APS 220, EFS, Loans and Finance Leases, Reporting, APRA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
CBE Issues Additional Measures to Ease Disruptions from PandemicNext Article
EBA Updates Filing Rules for Supervisory ReportingRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BaFin Consults on Resolvability Requirements for Resolution Planning
The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.
EBA Consults on Certain Standards and Guidelines Under CRR and BRRD
The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.
OJK Publishes Regulatory Updates for Financial Sector Entities
The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)
EU Publishes Rules on DLT and Data Governance
The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).
EBA Publishes Phase 2 of Reporting Framework 3.2
The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications