Document ID: chunk:federal_register_of_legislation:F2024L01519:body:0:p12
Version: federal_register_of_legislation:F2024L01519
Segment Type: other
Provision Reference: 
Character Range: 33422–36847

Exceeding 24 months                                      1.60
Other                                                    BB+ to BB- or unrated                                                               8.00
Below BB-                                                                                                         12.00

     1.              In Table 1, the 'government' category includes all forms of government paper including bonds, Treasury notes and other short‑term instruments. These debt instruments may be given a zero specific risk charge if:

        1.           they are issued, fully guaranteed or fully collateralised[5] by securities issued by the Australian Commonwealth, State or Territory governments or the Reserve Bank of Australia; or

        2.           they are issued, fully guaranteed or fully collateralised by securities issued by central governments or central banks within the Organisation for Economic Co-operation and Development (OECD); or

        3.           they are issued or fully guaranteed by non-OECD country central governments and central banks and have a residual maturity of one year or less and are denominated in local currency and the ADI's holdings of such paper are funded by liabilities in the same currency.

     1.              The 'qualifying' category includes securities that are:

        1.           rated investment grade by at least two external credit assessment institutions (ECAIs) within the meaning of APS 112 for the purpose of risk-weighting claims on rated counterparties and exposures; or

        2.           rated investment grade by one ECAI or unrated, but deemed, subject to APRA's written approval, to be of comparable investment quality by the ADI and the issuer has its equity included in a recognised market index (refer to Table 8). An ADI must apply to APRA for approval of a policy statement outlining securities the ADI considers to be of comparable investment quality.

     1.              In addition, debt securities may be treated as qualifying if they are:

        1.           issued or guaranteed by Australian local governments or Australian public sector entities (except those that have corporate status and operate on a commercial basis);[6]

        2.           issued or fully guaranteed by non-OECD country central governments or central banks and have a residual maturity of over one year and are denominated in local currency and the ADI's holdings of such paper are funded by liabilities in the same currency;

        3.           issued or fully collateralised by claims on an international agency or regional development bank, including the International Monetary Fund, the International Bank for Reconstruction and Development, the Bank for International Settlements and the Asian Development Bank;

        4.           issued, guaranteed, endorsed[7] or accepted by an Australian ADI or a bank incorporated in another OECD[8] country, provided such instruments do not qualify as capital of the issuing institution;[9]

        5.           issued, guaranteed, endorsed or accepted by a non-OECD bank and have a residual maturity of one year or less, provided such instruments do not qualify as capital of the issuing institution;

        6.            issued or guaranteed by OECD state and regional governments or OECD public sector entities;

        7.           issued or guaranteed