Document ID: chunk:federal_register_of_legislation:F2016L01429:body:0:p4
Version: federal_register_of_legislation:F2016L01429
Segment Type: other
Provision Reference: 
Character Range: 8237–11353

between formal reporting cycles;
(iii)       the circumstances in which aggregate risk exposure limits may be exceeded and the authority required for approving such excesses;
(iv)        thresholds and procedures for reporting material changes to the Board of the Level 3 Head, in both formal reporting cycles and outside formal reporting cycles;
(v)          consideration of the impact of material changes in macroeconomic conditions, including foreign exchange rates, interest rates and inflation; and
(vi)        a timetable for a regular review of the reports by the Board of the Level 3 Head.
14.         The aggregate risk exposure limits identified under paragraph 13(c) must take into account, where appropriate, matters such as:
(a)          on- and off-balance sheet exposures to:
(i)            various types of counterparties;
(ii)         an individual counterparty or group of related counterparties;
(iii)       individual industry sectors;
(iv)        geographical locations;
(v)          financial products, including risk transfer products;
(vi)        specific funding sources;
(vii)     various asset classes such as equities, property holdings and other investments;
(viii)   various market risks such as interest rate, foreign exchange and commodities; and
(ix)        any other material risks,
that cover asset and liability exposures and that are commensurate with the Level 3 group's risk appetite, risk profile and capital strength, and the size, business mix and complexity of the group; and
(b)          operational risk exposures to:
(i)            service providers;
(ii)         outsourcing;
(iii)       business continuity management; and
(iv)        any other operational risks.

Internal reporting systems
15.         A Level 3 Head's management information systems must incorporate reporting systems in relation to aggregate risk exposures across the Level 3 group.[2]
16.         Reports on material aggregate risk exposures must be provided to APRA on request.

Limits and approvals
17.         Where, in APRA's view, the Level 3 group is exposed to a significant level of aggregate risk exposure in specific risks, APRA may require a Level 3 Head to limit or reduce the Level 3 group's level of aggregate risk exposure. APRA may also determine how a Level 3 Head must calculate an aggregate risk exposure. In determining any requirement to limit or reduce the Level 3 group's level of aggregate risk exposure, or how a Level 3 Head must calculate an aggregate risk exposure, APRA may take account of the following factors:
(a)          whether the Level 3 group has been acting in a manner that is consistent with the aggregate risk exposures policy;
(b)          the characteristics of aggregate risk exposures, including their number, size and nature;
(c)          the characteristics of the Level 3 group, including the nature of its business and the experience of its management; and
(d)          other relevant factors to be considered on a case-by-case basis.

Notification requirements
18.         A Level 3 Head must notify APRA as soon as practicable, and no more than