Document ID: chunk:federal_register_of_legislation:F2022L01578:front:0:p16
Version: federal_register_of_legislation:F2022L01578
Segment Type: other
Provision Reference: 
Character Range: 42244–45341

may be); and (iii) how it complies with those requirements. The APRA covered entity's internal assessment, and any additional requested information, must be made available to APRA upon request.
68.         Where a member of an APRA covered entity's Level 2 group that is incorporated outside of Australia is directly subject to:
(a)          margin requirements of a foreign jurisdiction that are substantially similar to the BCBS-IOSCO framework; or
(b)          risk mitigation requirements of a foreign jurisdiction that are substantially similar to IOSCO's Risk Mitigation Standards,
the APRA covered entity may apply for approval by APRA to comply, in respect of that member, with the foreign jurisdiction's requirements in lieu of complying with the relevant requirements in this Prudential Standard.
69.         An APRA covered entity is not required to post or collect initial margin where either it or its counterparty to the transaction is incorporated, and operating, in a legal jurisdiction that does not permit it or its counterparty to satisfy the requirements in paragraph 27 of this Prudential Standard in relation to that transaction.
70.         An APRA covered entity is not required to exchange variation margin or post or collect initial margin if there is any doubt as to the enforceability of the netting agreement upon insolvency or bankruptcy of the counterparty. An APRA covered entity must monitor such exposures and set appropriate internal limits and controls to manage its exposure to such counterparties.
71.         An APRA covered entity is not required to exchange variation margin or post or collect initial margin where collateral arrangements are questionable or not legally enforceable upon default of the counterparty. An APRA covered entity must monitor such exposures and set appropriate internal limits and controls to manage its exposure to such counterparties.
72.         Applicable netting agreements and collateral arrangements must be supported by regularly updated legal opinions consistent with the requirements set out in Attachment H of APS 112.

Risk mitigation requirements for non-centrally cleared derivative transactions
73.         An APRA covered entity that transacts in non-centrally cleared derivatives must establish and implement policies and procedures for risk mitigation standards for non-centrally cleared derivative transactions with all of its counterparties (including counterparties that are in the same margining group). Subject to the requirements in paragraph 74 of this Prudential Standard, these policies and procedures may consider the nature of the risks and transaction type, as well as size, complexity, and operating environment of both the APRA covered entity and its counterparty in establishing an appropriate framework.
74.         An APRA covered entity entering into a non-centrally cleared derivative transaction with a covered counterparty must, at a minimum, apply the risk mitigation standards outlined in paragraphs 75 to 95 of this Prudential Standard.

Trading relationship documentation
75.         An