Document ID: chunk:federal_register_of_legislation:F2024L01319:body:0:p4
Version: federal_register_of_legislation:F2024L01319
Segment Type: other
Provision Reference: 
Character Range: 8647–11506

target amount.
 2.          An RSE licensee's replenishment plan must be approved by the Board prior to implementation.
 3.          APRA may require an RSE licensee to revise its replenishment plan if APRA considers that the plan does not comply with the RSE licensee's duties and obligations.

Review and audit
 1.          An RSE licensee must review the appropriateness of its ORFR target amount and tolerance limit at least annually and following a material operational risk incident or material change to the RSE licensee's business operations. The findings of the review must be reported to the Board.
 2.          An RSE licensee must implement satisfactory internal audit procedures and external audit arrangements to ensure compliance with, and the adequacy and effectiveness of, the ORFR strategy.[8]
 3.          APRA may require the appointment of an external expert to provide an assessment of, and report on, the adequacy and effectiveness of, the RSE licensee's approach to meeting the requirements of this Prudential Standard. The report must be paid for by the RSE licensee and must be made available to APRA, together with the Board's preliminary response within 30 business days after it has been provided to the RSE licensee.

Notification requirement
 1.          An RSE licensee must notify APRA prior to making a material change to the ORFR target amount.

[1]  For the purposes of this Prudential Standard, 'RSE licensee' has the meaning given in subsection 10(1) of the SIS Act.
[2]  For the purposes of this Prudential Standard, a reference to 'a Group' is a reference to a group comprising the RSE licensee and all connected entities of the RSE licensee. 'Connected entity' has the meaning given in subsection 10(1) of the SIS Act.
[3]  Refer to Prudential Standard CPS 230 Operational Risk Management for a description of operational risks at paragraphs 13 and 24.
[4]  For the purposes of this Prudential Standard, an RSE licensee's business operations includes all activities as an RSE licensee (including the activities of each RSE of which it is the licensee), and all other activities of the RSE licensee to the extent that they are relevant to, or may impact on, its activities as an RSE licensee.
[5]  Refer also to Prudential Standard SPS 515 Strategic Planning and Member Outcomes for requirements relating to the prudent management of reserves.
[6]  Prudential Standard APS 111 Capital Adequacy: Measurement of Capital states that Common Equity Tier 1 Capital comprises the highest quality components of capital that fully satisfy all of the following characteristics: (a) provide a permanent and unrestricted commitment of funds; (b) are freely available to absorb losses; (c) do not impose any unavoidable servicing charge against earnings; and (d) rank behind the claims of depositors and other creditors in the event