Document ID: chunk:federal_register_of_legislation:F2012L02221:body:0:p4
Version: federal_register_of_legislation:F2012L02221
Segment Type: other
Provision Reference: 
Character Range: 8182–11121

to meet the requirements in paragraphs 19(h) and (i) inclusive.
ORFR strategy
18.         An RSE licensee must have a strategy, approved by the Board, for meeting the ORFR target amount (ORFR strategy).[8] The Board is ultimately responsible for ensuring the implementation of an RSE licensee's ORFR strategy.
19.         At a minimum, an RSE licensee's ORFR strategy must describe:
       (a)          the factors that influence the size of the ORFR target amount and the tolerance limit, including amounts that the RSE licensee determines are required for each of the components in paragraph 8;
       (b)          whether the RSE licensee will use the method described in paragraph 14(a), (b) or (c) to meet the ORFR target amount and the steps that it takes to ensure that it complies with paragraph 12;
       (c)          the processes the RSE licensee will apply to ensure that the requirements in paragraphs 15 and 16 (as applicable) are met on an ongoing basis;
       (d)          how the RSE licensee has regard to the requirements of section 52(8)(b) of the SIS Act in relation to each RSE;
       (e)          the investment strategy for maintaining any operational risk reserves held to meet the ORFR target amount;
       (f)           the process for determining when and how the financial resources held to meet the ORFR target amount can be called upon;
       (g)          the process for implementing a replenishment plan in accordance with paragraph 20 (replenishment plan);
       (h)          the processes for monitoring and reviewing the adequacy of the ORFR target amount, including the steps to be taken to ensure the ORFR target amount remains at an appropriate level in the event of changes such as:
           (i)            a significant change in the size, business mix and complexity of an RSE within the RSE licensee's business operations; or

           (ii)         the wind-up of an RSE; and
       (i)            the process for managing the financial resources held to meet the ORFR target amount in the event that the RSE licensee is wound up.
Shortfall management
20.         If the level of financial resources held to meet the ORFR target amount falls below the tolerance limit, an RSE licensee must implement a replenishment plan. The replenishment plan must seek to replenish the level of financial resources held to meet the ORFR target amount within a reasonable period in a manner that ensures that the RSE licensee acts fairly in dealing with beneficiaries.[9] The replenishment plan must, at a minimum, explain:

       (a)          how the shortfall has arisen;
       (b)          the amounts that apply in relation to each RSE;
       (c)          how the RSE licensee will replenish the financial resources held to meet the ORFR target amount, including the source of funding; and
       (d)          the expected date for the RSE licensee to again meet the ORFR target amount.
    21.