Document ID: chunk:federal_register_of_legislation:F2019L00669:body:0:p4
Version: federal_register_of_legislation:F2019L00669
Segment Type: other
Provision Reference: 
Character Range: 8705–11692

this power or discretion is to be exercised in writing.
8.             For the purposes of this Prudential Standard:
'group' means a Level 2 group or a Level 3 group, as relevant;
'Head of a group' means a Level 2 Head or Level 3 Head, as relevant;
'Level 2 group' means the entities that comprise:
       (a)          Level 2 as defined in APS 001; or
       (b)          a Level 2 insurance group as defined in GPS 001;
'Level 2 Head' means:
       (a)          where an ADI that is a member of a Level 2 group is not a subsidiary of an authorised banking NOHC or another ADI, that ADI;
       (b)          where an ADI that is a member of a Level 2 group is a subsidiary of an authorised banking NOHC, that authorised banking NOHC; or
       (c)          the parent entity of a Level 2 insurance group as defined in GPS 001.

The role of the Board
9.             The Board[3] of an APRA-regulated institution is ultimately responsible for the institution's risk management framework and is responsible for the oversight of its operation by management. In particular, the Board must ensure that:
       (a)          it sets the risk appetite within which it expects management to operate and approves the institution's risk appetite statement and risk management strategy (RMS);
       (b)          it forms a view of the risk culture in the institution, and the extent to which that culture supports the ability of the institution to operate consistently within its risk appetite, identify any desirable changes to the risk culture and ensures the institution takes steps to address those changes;
       (c)          senior management of the institution monitor and manage all material risks consistent with the strategic objectives, risk appetite statement and policies approved by the Board;
       (d)          the operational structure of the institution facilitates effective risk management;
       (e)          policies and processes are developed for risk-taking that are consistent with the RMS and the established risk appetite;
       (f)           sufficient resources are dedicated to risk management; and
       (g)          it recognises uncertainties, limitations and assumptions attached to the measurement of each material risk.

Use of group risk management by an APRA-regulated institution
10.         An APRA-regulated institution that is part of a group or other corporate group may meet requirements of this Prudential Standard using group risk management frameworks, policies, procedures or functions, provided that the Board of the institution is satisfied that the requirements are met in respect of that institution.
11.         For the avoidance of doubt, compliance by a group with the requirements of this Prudential Standard does not relieve an APRA-regulated institution within the group from the need to comply with any prudential requirements of that institution.
12.         Where an APRA-regulated institution is part of a group and any element of