Document ID: chunk:federal_register_of_legislation:F2022L01577:body:0:p2
Version: federal_register_of_legislation:F2022L01577
Segment Type: other
Provision Reference: 
Character Range: 3039–5970

well as the relevant high level controls in the risk management strategy required under Prudential Standard CPS 220 Risk Management (CPS 220). As part of its prudential oversight of the Australian operations of a foreign ADI, APRA may discuss with the foreign ADI's parent and home supervisor any undue credit risk concentrations associated with the foreign ADI's Australian operations.
4.             A reference to an ADI in this Prudential Standard, unless otherwise indicated, is a reference to:
(a)          an ADI on a Level 1 basis; and
(b)          a group of which an ADI is a member on a Level 2 basis.
5.             If an ADI to which this Prudential Standard applies is:
(a)          the holding company for a group, the ADI must ensure that the requirements in this Prudential Standard are met on a Level 2 basis, where applicable; or
(b)          a subsidiary of an authorised non-operating holding company (authorised NOHC), the authorised NOHC must ensure that the requirements in this Prudential Standard are met on a Level 2 basis, where applicable.
6.             This Prudential Standard commences on 1 January 2023.

Interpretation
7.             Terms that are defined in Prudential Standard APS 001 Definitions appear in bold the first time they are used in this Prudential Standard.
8.             Where this Prudential Standard provides for APRA to exercise a power or discretion, this power or discretion is to be exercised in writing. In this Prudential Standard, unless the contrary intention appears, a reference to an Act, Regulations, Prudential Standard or Australian Accounting Standards is a reference to the instrument as in force from time to time.

Definitions
9.             The following definitions are used in this Prudential Standard:
(a)          government-related entity means a public sector entity, a state-owned enterprise or an entity controlled (whether directly or indirectly) by  any level of government or a central bank;
(b)          group of connected counterparties has the meaning given in paragraph 21 of this Prudential Standard; and
(c)          retail exposure means an exposure to a counterparty who is a natural person or for an ADI subject to Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113) an exposure categorised as a retail exposure for the purposes of APS 113.

The role of the Board
10.         The Board of directors (Board) of an ADI is ultimately responsible for the oversight of the ADI's large exposures and risk concentrations and for approving policies governing large exposures and risk concentrations of the ADI. The Board must ensure that these policies are reviewed regularly (at least annually) and that they remain adequate and appropriate for the ADI's risk appetite, risk profile, capital and balance sheet size.

Control of large exposures and risk concentrations
11.         An ADI's large