Document ID: chunk:federal_register_of_legislation:F2023L01380:body:0:p5
Version: federal_register_of_legislation:F2023L01380
Segment Type: other
Provision Reference: 
Character Range: 11127–14238

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 level for the preparation, maintenance and execution of the recovery and exit plan;
(d)          credible recovery actions that could be taken to stabilise and restore financial resilience;
(e)          credible exit actions that could be taken to effect an orderly and solvent exit from regulated activity; and
(f)           a communication strategy to support the execution of recovery and exit actions.
20.         An SFI must also include in its recovery and exit plan:
(a)          scenario analysis that assesses the effectiveness of the trigger framework, shows how recovery and exit actions could be implemented, and measures the impact and effectiveness of those actions. This analysis must include at least two scenarios that are severe enough to threaten the SFI's viability, including a systemic and an idiosyncratic stress; and
(b)          an assessment of recovery capacity, which is the aggregate impact of plausible recovery actions under each scenario. Recovery capacity must be measured in quantitative terms by calculating the amount of capital and liquidity that can be rebuilt during or following stress, where relevant.
21.         An SFI must include, for each recovery and exit action in the plan:
(a)          a timeline for the implementation of the action;
(b)          analysis of any barriers to implementation, execution risks and key dependencies;
(c)          a summary of the preparatory measures needed to support the timely and effective execution of the action; and
(d)          where relevant, an estimate of the impact of the action on the capital and liquidity position of the APRA-regulated entity, based on credible assumptions.[11]
22.         APRA may require of an APRA-regulated entity:
(a)          the inclusion or exclusion of a particular recovery or exit action within the recovery and exit plan;
(b)          the inclusion of an APRA-determined scenario in the recovery and exit plan; or
(c)          the use of particular assumptions when assessing recovery capacity.
23.         For an APRA-regulated entity other than an RSE licensee, APRA may adjust prudential requirements for capital and liquidity where it assesses there to be material weaknesses in the recovery and exit plan.

Capabilities, monitoring and execution
24.         An APRA-regulated entity must maintain the capabilities required to execute the recovery and exit plan.[12]
25.         An APRA-regulated entity must take reasonable preparatory steps to support the timely and effective implementation of the recovery and exit plan, in advance of recovery or exit actions being required. This must take into consideration potential legal, financial, operational and structural requirements for executing recovery or exit actions.
26.         An APRA-regulated entity must maintain access to sufficient financial