Document ID: chunk:federal_register_of_legislation:F2023L00682:body:0:p3
Version: federal_register_of_legislation:F2023L00682
Segment Type: other
Provision Reference: 
Character Range: 5645–8786

the group;
       (e)          the nature of capital held by the group, including its maturity, servicing costs and any double counting of capital within the group; and
       (f)           the ability to readily transfer surplus or free capital within the group and the nature of capital that may be available to individual entities from other entities in the group, if required.

Internal Capital Adequacy Assessment Process
8.             A regulated institution (except a run-off insurer[1]) must have in place an Internal Capital Adequacy Assessment Process (ICAAP) that must:
       (a)          be adequately documented, with the documentation made available to APRA on request; and
       (b)          be approved by the Board initially, and when significant changes are made.
9.             A regulated institution's ICAAP must be appropriate to the regulated institution's size, business mix and complexity of its operations and group structure (as applicable).
10.         A regulated institution that is part of a group may rely on the ICAAP of the group provided that the Board of the regulated institution[2] is satisfied that the group ICAAP meets the criteria in paragraph 11 of this Prudential Standard in respect of the regulated institution.
11.         The ICAAP must include at a minimum:
       (a)          adequate policies, procedures, systems, controls and personnel to identify, measure, monitor and manage the risks arising from the regulated institution's activities on a continuous basis, and the capital held against such risks;
       (b)          a strategy for ensuring adequate capital is maintained over time, including specific capital targets set out in the context of the regulated institution's risk profile, the Board's risk appetite and regulatory capital requirements. This includes plans for how target levels of capital are to be met and the means available for sourcing additional capital where required;
       (c)          actions and procedures for monitoring the regulated institution's compliance with its regulatory capital requirements and capital targets. This  includes the setting of triggers to alert management to, and specified actions to avert and rectify, potential breaches of the regulatory capital requirements;
       (d)          stress testing and scenario analysis relating to potential risk exposures and available capital resources;
       (e)          processes for reporting on the ICAAP and its outcomes to the Board and  senior management of the regulated institution, and for ensuring that the ICAAP is taken into account in making business decisions;
       (f)           policies to address the capital impact of material risks not covered by explicit regulatory capital requirements; and
       (g)          an 'ICAAP summary statement' as defined in paragraph 12.
12.         The ICAAP summary statement is a high level document that describes and summarises the capital assessment and management processes of the regulated institution. It must outline at a minimum the aspects of the ICAAP listed in paragraph 11 (a) to (f) and this paragraph. The ICAAP summary