Document ID: chunk:federal_register_of_legislation:F2022L01620:reg:100:p3
Version: federal_register_of_legislation:F2022L01620
Segment Type: reg
Provision Reference: reg 100 (pt 3/12)
Character Range: 71557–74691

funds will receive a zero per cent inflow rate.

Other cash inflows

    Derivatives cash inflows[8]

    65.         These derivative items receive an inflow rate of 100 per cent.

    Other contractual cash inflows

    66.         Other contractual cash inflows receive an inflow rate of 100 per cent. Cash inflows related to non-financial revenues are not taken into account in the calculation of the net cash outflows for the purposes of the LCR.

Attachment B

Minimum liquidity holdings approach

     1. For the purpose of this Attachment, liabilities are defined as total on-balance sheet liabilities and irrevocable commitments, except where approved for a prudential purpose by APRA.

     2. For the purpose of the MLH requirement, liquid assets must be free from encumbrances, except where approved for a prudential purpose by APRA, and include:

       (a)          notes and coin and settlement funds;

       (b)          Commonwealth Government and semi-government securities;

       (c)          debt securities guaranteed by the Australian Government, or foreign sovereign governments;

       (d)          debt securities issued by supranationals and foreign governments;

       (e)          bank bills, certificates of deposits (CDs) and debt securities issued by ADIs;

       (f)           deposits (at call and any other deposits readily convertible into cash within two business days) held with other ADIs net of placements by other ADIs; and

       (g)          any other securities approved by APRA.

    3.             All debt securities must be eligible for repurchase agreement with the RBA and must not be subordinated.

    4.             An MLH ADI must ensure it has the operational capacity to liquidate any securities held as liquid assets within two business days.

    5.             In order to ensure that the MLH requirement is not breached, absent a situation of financial stress, an ADI must set a trigger ratio above its MLH requirement and must ensure that it manages its liquidity in accordance with its trigger ratio.

    6.             An ADI must inform APRA immediately when it becomes aware that its liquid assets may fall below its MLH requirement and advise APRA of the remedial action taken or planned to restore its liquidity position above its MLH requirement.

Attachment C

Net stable funding ratio

     1. The objective of the NSFR is to reduce the funding risk of an ADI over a one-year time horizon by requiring an ADI to fund its activities with sufficiently stable sources of funding in order to mitigate the risk of future funding stress.

     2. The NSFR has two components:

       (a)          available stable funding (ASF); and

       (b)          required stable funding (RSF).

    3.             The NSFR is calculated as:

    4.             An ADI must maintain an appropriate buffer above its required NSFR under this Prudential Standard, in line with its liquidity risk tolerance, at all times.

    5.             For the purposes of this Attachment, the meanings and definitions in Attachment A apply unless otherwise indicated.