Document ID: chunk:federal_register_of_legislation:F2024L01319:body:0:p1
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Superannuation (prudential standard) determination No. 6 of 2024

Prudential Standard SPS 114 Operational Risk Financial Requirement

Superannuation Industry (Supervision) Act 1993

I, Sean Carmody, a delegate of APRA:
    (a) under subsection 34C(6) of the Superannuation Industry (Supervision) Act 1993 REVOKE Superannuation (prudential standard) determination No. 1 of 2012, including Prudential Standard SPS 114 Operational Risk Financial Requirement made under that determination; and
    (b) under subsection 34C(1) of the Act, DETERMINE Prudential Standard SPS 114 Operational Risk Financial Requirement in the form set out in the Schedule, which applies to all RSE licensees.
This instrument commences on 1 July 2025.

Dated:  11 October 2024

Sean Carmody
Executive Director
Policy and Advice Division

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

RSE licensee has the meaning given in subsection 10(1) of the Act.

Schedule

Prudential Standard SPS 114 Operational Risk Financial Requirement

Prudential Standard SPS 114
Operational Risk Financial Requirement
Objectives and key requirements of this Prudential Standard
Prudential Standard SPS 114 Operational Risk Financial Requirement (SPS 114) is a prudential standard in the business operations pillar of APRA's superannuation prudential framework. The Operational Risk Financial Requirement (ORFR) requires RSE licensees to maintain, manage and utilise, in accordance with this Prudential Standard, financial resources to protect beneficiaries from losses due to operational risks that relate to the RSEs within its business operations. Key requirements include having a documented ORFR strategy, an ORFR target amount and tolerance limit.  An RSE licensee must maintain ORFR financial resources which must be used in a manner consistent with the ORFR and the overarching legislative requirements.

Authority
 1.              This Prudential Standard is made under section 34C of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Application and commencement
 1.              This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees).[1]
 2.              The requirements of this Prudential Standard apply for the purposes of section 52(8)(b) of the SIS Act.
 3.              This Prudential Standard commences on 1 July 2025.

Interpretation
 1.              Where this Prudential Standard provides for APRA to exercise a power or discretion, the power or discretion is to be exercised in writing.

Adjustments and exclusions
 1.              APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to:
         1.           a particular RSE licensee of an RSE; or
         2.           specified RSE licensees of RSEs.

Previous exercise of discretion
 1.              An RSE licensee must contact APRA if it seeks to place reliance, for the purposes of complying with this Prudential Standard, on an exercise of discretion by APRA made under a previous version of this Prudential Standard.

RSE licensees that are part of a group[2]
 1.              Where an RSE licensee is part of a corporate group, and the RSE licensee utilises