Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p9
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 22926–26309

all of the following criteria:
        1.           the borrower is a corporate entity that is managed by a recognised, professional and reputable management team;
        2.           the ADI's exposure to the borrower is not specifically or substantially financing limited recourse development projects;
        3.           the borrower has greater than $250 million in tangible assets, to which the ADI has unconditional recourse;
        4.           real estate assets are sufficiently diversified such that:
                1.             no single asset represents greater than 25 per cent of the borrower's real estate portfolio by value; and
                2.          real estate assets are not concentrated in one particular specific geographic location; and
        5.           for real estate operators or investors, tenants are sufficiently diversified such that no single tenant represents:
                1.             greater than 25 per cent of portfolio net rental income for portfolios of retail shopping centres that typically require significant anchor tenants to attract speciality tenants; and
                2.          greater than 10 per cent of portfolio net rental income for all other portfolios of real estate assets (e.g. commercial offices, industrial buildings, hotels), with the exception of Government tenants.

Definition of sovereign exposures
 1.          The sovereign IRB asset class includes all credit exposures to sovereign counterparties as defined in APS 112.

Definition of financial institution exposures
 1.          The financial institution IRB asset class includes all credit exposures to financial institution counterparties and public sector entities that carry out the functions of a financial institution. A financial institution means a legal entity whose main business includes: the management of financial assets, lending, factoring, leasing, provision of credit enhancements, securitisation, investments, financial custody, central counterparty services, or proprietary trading. APRA may also determine other activities to be financial in nature. Financial institutions include, but are not limited to, banks, securities firms, insurance companies and leveraged funds.

Definition of retail exposures
 1.          The retail IRB asset class includes any exposure that:
        1.           is extended to an individual (that is, a natural person) or individuals; and
        2.           forms part of a large pool of exposures that is managed by the ADI on a pooled basis.
    Small-business exposures or exposures secured by residential real estate, whether or not extended to an individual, may be classified as retail exposures where they satisfy the criteria in paragraphs 37 or 40 of this Prudential Standard, respectively.
 1.          An ADI must assign its retail exposures to either the retail residential mortgage, qualifying revolving retail (QRR), small- and medium-sized enterprise (SME) retail or other retail sub-asset classes.

Retail residential mortgage
 1.          The retail residential mortgage IRB sub-asset class includes exposures that are:
        1.           partly or fully secured by residential real estate;
        2.           managed in a similar manner to other retail exposures; and
        3.           not for business purposes.

Qualifying revolving retail
 1.          The QRR