Document ID: chunk:federal_register_of_legislation:F2020L01591:body:0:p9
Version: federal_register_of_legislation:F2020L01591
Segment Type: other
Provision Reference: 
Character Range: 21395–24281

transaction exposes the ADI to substantial contagion risks or hinders effective supervision.
40.         APRA may determine that an ADI is not required to notify APRA prior to committing to proposed transactions that are below a specified threshold, having regard to the robustness of the ADI's risk management framework.

Notification requirements
41.         An ADI must notify APRA immediately of any breach of the limits in paragraph 29 of this Prudential Standard or other specific limits imposed by APRA under paragraph 33 of this Prudential Standard, including how the breach arose and remedial actions taken or planned to deal with the breach.[8]
42.         An ADI must notify APRA regarding any equity investments that are not subject to the prior notification requirements set out in paragraph 38 of this Prudential Standard, within three months of undertaking the investment.
43.         An ADI must notify APRA immediately after it becomes aware of any circumstances that might reasonably be seen as having a material impact or potentially adverse consequences for an ADI in the group or for the overall group. This includes, but is not limited to, material changes in the structure of a group which is headed by the ADI and a significant breach of, or material changes in, the ADI's policies on dealings with related entities.

Approval requirements
44.         An ADI must obtain approval from APRA prior to undertaking any proposed exposures in excess of the limits set out in paragraph 29 of this Prudential Standard or any specific limit imposed by APRA under paragraph 33 of this Prudential Standard. APRA will only grant such approval on an exceptions basis taking into consideration the individual circumstances of the ADI and the ADI's assessment of:
(a)          the contagion risks involved with exceeding the limits (including the factors in paragraph 13 of this Prudential Standard) and why the proposed exposures will not unreasonably expose the ADI to excessive risk; and
(b)          how the proposed exposures are consistent with its policies on related entities.
45.         An ADI must obtain approval from APRA prior to the establishment or acquisition of a regulated entity, branch or presence domestically or overseas.

Attachment A — Step-in risk
     1. An ADI must maintain a risk appetite statement and strategy for managing its associations and dealings with step-in risk entities.
     2. An ADI must have adequate systems and controls in place to identify, measure, monitor, manage and report exposures arising from dealings with step-in risk entities.
3.             An ADI must identify an entity which exposes the ADI to step-in risk. In identifying step-in risk entities, the factors that an ADI must consider include, but are not limited to:
(a)          the nature and extent of the ADI's sponsorship of the entity, including whether the