Document ID: chunk:federal_register_of_legislation:F2023L01380:body:0:p4
Version: federal_register_of_legislation:F2023L01380
Segment Type: other
Provision Reference: 
Character Range: 8371–11404

as in force from time to time.
11.         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
12.         APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to an APRA-regulated entity.

Recovery and exit planning
13.         An APRA-regulated entity must develop and maintain a recovery and exit plan that sets out how it would respond to a stress that threatens its viability. The recovery and exit plan must demonstrate how the APRA-regulated entity could:
(a)          take actions to recover its financial resilience; and
(b)          enable its orderly and solvent exit from regulated activity, if actions to recover financial resilience are not effective.
14.         The recovery and exit plan must be appropriate to the size, business mix and complexity of the APRA-regulated entity and, for an RSE licensee, the RSE licensee's business operations.
15.         The recovery and exit plan must be integrated into the APRA-regulated entity's:
(a)          risk management framework;[7]
(b)          capital management and liquidity management frameworks, as relevant for an APRA-regulated entity other than an RSE licensee; and
(c)          business plan and business performance review for an RSE licensee.[8]
16.         An APRA-regulated entity must not assume extraordinary public sector support in its recovery and exit planning.

Role of the Board
17.         The Board[9] of an APRA-regulated entity is ultimately responsible for the oversight of the entity's recovery and exit planning. The Board of an APRA-regulated entity must:
(a)          approve the recovery and exit plan;
(b)          oversee reviews of the recovery and exit plan and ensure any findings are addressed by management; and
(c)          oversee the execution of any recovery and exit actions.
18.         The Board of an SFI must also form a view on the sufficiency of recovery capacity to restore financial resilience in periods of stress. Where the Board views recovery capacity to be insufficient, the SFI must improve its recovery and exit plan or take other actions to improve its financial resilience.

Recovery and exit plan
19.         An APRA-regulated entity's recovery and exit plan must include:
(a)          a concise summary that provides a standalone guide to use the recovery and exit plan;
(b)          a trigger framework for the early identification and monitoring of stress. The trigger framework must be relevant to the operating environment and risk profile of the APRA-regulated entity, and include a range of early warning indicators to support the effective activation and implementation of the recovery and exit plan;[10]
(c)          governance arrangements for the monitoring of triggers and timely activation of the recovery and exit plan or specific actions within it. Governance arrangements must include clear roles and responsibilities at a senior executive