Document ID: chunk:federal_register_of_legislation:F2022L01620:front:0:p18
Version: federal_register_of_legislation:F2022L01620
Segment Type: other
Provision Reference: 
Character Range: 46294–49082

in the specified stress scenario for the subsequent 30 calendar days. Total expected cash outflows are calculated by multiplying the outstanding balances of various categories or types of liabilities and off-balance sheet commitments by the rates at which they are expected to run off or be drawn down as set out in Table 3 of paragraph 53 of this Attachment. Total expected cash inflows are calculated by multiplying the outstanding balances of various categories of contractual receivables by the rates (refer to paragraphs 54 to 66 of this Attachment) at which they are expected to flow in under the scenario, up to an aggregate cap of 75 per cent of total expected cash outflows. That is:

    31.         An ADI must not double‑count items. That is, if assets are included as part of the stock of HQLA (the numerator of the LCR), the associated cash inflows cannot also be counted as cash inflows.

    32.         APRA will assess the suitability of an ADI's assumptions made for those cash flow items that are derived. An ADI must be in a position to provide analysis and evidence to justify the assumptions.

    33.         Where APRA determines that an ADI is actively using collateral swaps for liquidity management purposes, APRA may require that the ADI include in its LCR calculation the net cash flow impact of collateral swaps based on a method determined by APRA at that time.

Cash outflows

Retail deposit outflows

    34.         For the purposes of the LCR, retail deposits are defined as deposits placed with an ADI by a natural person. Deposits from legal entities, sole proprietorships or partnerships are captured in wholesale deposit categories. Retail deposits include demand deposits and term deposits, unless otherwise excluded under the criteria set out in paragraphs 41 and 42 of this Attachment.

    35.         Where a person places funds with an intermediary, which then places those funds with an ADI, the deposit with the ADI is considered to be a deposit from a financial institution unless, during the next 30 days:
(a)          the person retains all legal rights regarding the withdrawal or other movement of the funds;
(b)          the person exercises these rights in practice and cannot transfer these rights to the intermediary;
(c)          there is clear and prominent disclosure to the person that the funds will be placed with the ADI; and
(d)          the intermediary or an associated entity can neither make investment decisions on behalf of the person regarding the deposit, nor withdraw funds from the ADI in the absence of specific directions to do so from the person (other than miscellaneous items such as fees, expense reimbursements, taxes).
If all of these conditions are satisfied, an ADI may treat the funds as if they