Document ID: chunk:federal_register_of_legislation:F2023L01572:front:0:p17
Version: federal_register_of_legislation:F2023L01572
Segment Type: other
Provision Reference: 
Character Range: 43384–46357

a funding arrangement involving an ADI providing another party an interest in the ADI's assets, the ADI must notify APRA of the proposed arrangement, except in relation to:
(a)          a covered bond issued consistent with Division 3A of Part II of the Banking Act;
(b)          a covered bond issued or originated by an overseas Level 2 banking subsidiary in accordance with the requirements of its regulator;
(c)          a securitisation that complies with the operational requirements for regulatory capital relief (refer to Attachment A);
(d)          a securitisation that complies with the operational requirements for funding-only (refer to Attachment B);
(e)          a synthetic securitisation that complies with the requirements in this Prudential Standard;
(f)           repurchase agreements over marketable (publicly rated, tradeable) securities;
(g)          securities lending agreements; or
(h)          agreements which provide for collateral as a part of over-the-counter or centrally-cleared derivatives transactions.
80.         As part of its notification to APRA, an ADI must establish to APRA's satisfaction that the arrangement does not entail any other party to the arrangement achieving, even in limited or unlikely circumstances, an effective recourse to any pool of assets covered by the arrangement in preference to claims on assets of the ADI established under subsections 13A(3)(a) to (e) of the Banking Act.
81.         In the event that an ADI cannot satisfy APRA as to the ADI's compliance with paragraph 80, the ADI must, for the purposes of calculating its capital adequacy (on both a Level 1 and Level 2 basis) under Prudential Standard APS 110 Capital Adequacy, deduct those assets in the pool from the ADI's Common Equity Tier 1 Capital, and not include those assets in the ADI's assets for the purposes of subsection 13A(4)(a) of the Banking Act.
82.         For those arrangements where APRA is satisfied with an ADI's compliance with paragraph 80, APRA will notify the ADI how the ADI's exposures, if any, associated with the arrangement must be treated for the purposes of Prudential Standard APS 111 Capital Adequacy: Measurement of Capital, APS 112 or APS 113 or any other Prudential Standard, as relevant. APRA may determine that such exposures must also be deducted from the ADI's Common Equity Tier 1 Capital (on a Level 1 and Level 2 basis).

Adjustments and exclusions
83.         APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to an ADI.[27]

Previous exercise of discretion
84.         An exercise of APRA's discretion (such as an approval, waiver or direction) under a previous version of this Prudential Standard continues to have effect as though exercised pursuant to a corresponding power (if any) exercisable by APRA under this Prudential Standard.

Attachment A — Operational requirements for regulatory capital relief

Significant credit risk transfer
     1. In order