Document ID: chunk:federal_register_of_legislation:F2020L01591:body:0:p5
Version: federal_register_of_legislation:F2020L01591
Segment Type: other
Provision Reference: 
Character Range: 11032–13849

or is deemed to trigger a default by the ADI on its obligations.
17.         An ADI must implement adequate systems and controls to identify, measure, monitor, manage and report exposures arising from dealings with related entities and step-in risk entities. Where APRA is not satisfied with the adequacy of the ADI's systems and controls or is of the view that the ADI is exposed to substantial contagion risk, APRA may:
(a)          determine higher capital adequacy requirements including Prudential Capital Requirements (PCRs) for the ADI;
(b)          require the ADI to establish additional internal controls or a more robust reporting mechanism; or
(c)          require the ADI to take measures to reduce the level of contagion risk to its related entities or step-in risk entities.
18.         An ADI must meet the requirements in relation to the identification, measurement and management of step-in risk as set out in Attachment A to this Prudential Standard.

Provision of support
19.         An ADI must not undertake any dealings with unrelated entities for the purpose of supporting the business of related entities.
20.         An ADI must not provide support to related entities, and an ADI must not accept support from its related entities, unless such support is expressed clearly in legal documentation, is fixed as to time and amount, and is in accordance with the ADI's policies and the prudential requirements set out in paragraphs 13 to 17 of this Prudential Standard.[4]
21.         An ADI must satisfy APRA, upon request, that when it purchases assets from or securities or other forms of liabilities issued by a related entity, or sells assets and securities to a related entity, that these activities do not constitute the ADI providing capital support to the related entity. APRA may require an ADI to deduct from Common Equity Tier 1 Capital the value of assets, securities or other liabilities where APRA is not satisfied that the activities do not constitute the provision of capital support.
22.         An ADI must meet the requirements in Attachment B to this Prudential Standard in relation to the provision of liquidity facilities to funds management vehicles.
23.         A foreign ADI must not provide support to its subsidiaries operating in Australia, and a foreign ADI must not accept support from its subsidiaries operating in Australia, unless such support is expressed clearly in legal documentation and is fixed as to time and amount. A foreign ADI that wishes to give a general guarantee over the obligations of its Australian subsidiaries must be able to demonstrate to APRA that its home supervisor is aware of the obligations and has no objection to the transaction.

Group badging and disclosures
24.         An ADI must not use a brand name in common with members of