Document ID: chunk:federal_register_of_legislation:F2022L01492:body:0:p2
Version: federal_register_of_legislation:F2022L01492
Segment Type: other
Provision Reference: 
Character Range: 3146–6437

January 2023.

Interpretation

    4.             Where this Prudential Standard provides for APRA to exercise a power or discretion, the power or discretion is to be exercised in writing.
Adjustments and exclusions

    5.             APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to:
       (a)          a particular RSE licensee of an RSE;

       (b)          a particular connected entity of an RSE licensee of an RSE;

       (c)          specified RSE licensees of RSEs; or

       (d)          specified connected entities of RSE licensees of RSEs.

Previous exercise of discretion
    6.             An RSE licensee must contact APRA if it seeks to place reliance, for the purposes of complying with this Prudential Standard, on a previous exercise of discretion by APRA under a previous version of this Prudential Standard.

The role of the Board

    7.             An RSE licensee is ultimately responsible for the sound and prudent management of the investments of each RSE within the RSE licensee's business operations.[2]

    8.             The Board of an RSE licensee (the Board[3]) must, for the RSE licensee's business operations, at a minimum:

       (a)          approve investment objectives for each investment option offered in each RSE;

       (b)          approve an investment strategy, in respect of each RSE, that is consistent with the RSE licensee's duties to beneficiaries, including those in section 52(6) and (13) (if applicable) of the SIS Act and the requirements in this Prudential Standard:

           (i)            for the whole of that RSE; and

           (ii)         in respect of each investment option offered in that RSE;

       (c)          monitor and assess regularly whether the investment objectives are being met; and

       (d)          take appropriate and timely action regarding information contained in reports to the Board on investment matters.

RSE licensees that are part of a group[4]
    9.             Where an RSE licensee is part of a corporate group, and the RSE licensee utilises group policies or functions, the Board must approve the use of group policies and functions and must ensure that these policies and functions give appropriate regard to the RSE licensee's business operations.

Investment governance framework

    10.         An RSE licensee must at all times have an investment governance framework to manage investments to meet the RSE licensee's obligations to beneficiaries.[5]

    11.         An investment governance framework is the totality of systems, structures, policies, processes and people to address the RSE licensee's responsibilities with regard to investments of each RSE within the RSE licensee's business operations. An RSE licensee's responsibilities include generating returns to meet investment objectives while managing and monitoring all identified sources of investment risk.[6]

    12.         The Board is ultimately responsible for the establishment, implementation, oversight and maintenance of an RSE licensee's investment governance framework.

    13.         An RSE licensee's investment governance framework must, at a minimum, include:

       (a)          investment objectives for each investment