Document ID: chunk:federal_register_of_legislation:F2024L00940:body:0:p3
Version: federal_register_of_legislation:F2024L00940
Segment Type: other
Provision Reference: 
Character Range: 5916–8973

results;
       (b)          where an RSE licensee has decided to undertake a transfer of beneficiaries, remedial action or other recovery or exit activities, how this decision will be implemented. This includes, where necessary, adjusting key strategic initiatives and maintaining business operations during implementation.
13.         An RSE licensee must be able to demonstrate how the business plan reflects the RSE licensee's view of its current, and expected, level of financial resources, informed by[7]:
       (a)          financial projections that demonstrate the ongoing financial soundness of the RSE licensee's business operations, including under different potential scenarios, for at least the term of the business plan; and
       (b)          key assumptions used in the required financial projections and how these assumptions take into account the material risks identified under the risk management framework.
    14.         The business plan must be updated annually having regard to the results of the most recent business performance review and ongoing monitoring. The annual updates to the business plan must incorporate changes to the RSE licensee's business operations that the RSE licensee considers are likely to improve outcomes for beneficiaries or the sound and prudent management of its business operations including, but not limited to, changes arising from recovery and exit planning activities required under Prudential Standard CPS 190 Recovery and Exit Planning or changes arising from remedial actions or transfer planning required under this Prudential Standard.

Financial resource management
15.         An RSE licensee must have a robust approach to the management of the financial resources available to support achieving the outcomes sought for beneficiaries and the sound and prudent management of the RSE licensee's business operations.

Setting fees
16.         An RSE licensee must set each fee prudently and transparently. This includes demonstrating why the RSE licensee is satisfied, with respect to a fee charged to beneficiaries or a fee charged by the RSE licensee out of an RSE, that:
       (a)          the charging of the fee, including determining the amount of the fee, complies with its legal duties and obligations; and
       (b)          the fee is appropriate and proportionate, having regard to factors such as the arm's length value of the features and services that the fee relates to, comparable fees charged in relation to comparable RSEs and financial resources currently available to the RSE licensee.
17.         An RSE licensee must ensure that the use of any new fee power, or the use of an existing power for the first time, is approved by the Board.

Management of reserves
18.         An RSE licensee's strategy for the prudent management of reserves must demonstrate the need for, and purpose of, each reserve in the RSE licensee's business operations.[8] An RSE licensee's reserving strategy must include:
       (a)          how each reserve is managed in the context of its