Document ID: chunk:federal_register_of_legislation:F2022L01577:body:0:p1
Version: federal_register_of_legislation:F2022L01577
Segment Type: other
Provision Reference: 
Character Range: 0–3286

Banking (prudential standard) determination No. 15 of 2022

Prudential Standard APS 221 Large Exposures

Banking Act 1959

I, Renée Roberts, a delegate of APRA:

    (a)               under subsection 11AF(3) of the Banking Act 1959 (the Act) REVOKE Banking (prudential standard) determination No. 4 of 2019, including Prudential Standard APS 221 Large Exposures, made under that determination; and

    (b)               under subsection 11AF(1) of the Act DETERMINE Prudential Standard APS 221 Large Exposures, in the form set out in the schedule, which applies to all ADIs and authorised NOHCs to the extent provided in paragraphs 2 to 5 of the prudential standard.

This instrument commences on 1 January 2023.

Dated: 1 December 2022

[Signed]

Renée Roberts
Executive Director
Policy and Advice Division

Interpretation

      In this instrument:

APRA means the Australian Prudential Regulation Authority.

ADI and authorised NOHC have their respective meanings given in section 5 of the Act.

Schedule
Prudential Standard APS 221 Large Exposures comprises the document commencing on the following page.

Prudential Standard APS 221

Large Exposures
Objectives and key requirements of this Prudential Standard
This Prudential Standard requires authorised deposit-taking institutions to implement prudent measures and to set prudent limits to monitor and control their large exposures and risk concentrations.
The key requirements of this Prudential Standard are that an authorised deposit-taking institution must:
     * have a Board-approved policy that governs its large exposures and risk concentrations;
     * have adequate systems and controls to identify, measure, monitor and report large exposures and risk concentrations;
     * identify connected counterparties;
     * ensure its large exposures meet the large exposure limits; and
     * measure exposure values for large exposure purposes using specified treatments.

Table of Contents
Authority
Application
Interpretation
Definitions
The role of the Board
Control of large exposures and risk concentrations
Identifying large exposures
Large exposure limits
Measuring large exposure values
Prior notification requirements
Approval requirements
Notification requirements
Significant risk concentrations
Adjustments and exclusions
Previous exercise of discretion
Attachment A — Measuring large exposure values

Authority
     1. This Prudential Standard is made under section 11AF of the Banking Act 1959 (Banking Act).

Application
2.             This Prudential Standard applies to all authorised deposit-taking institutions (ADIs), subject to paragraph 3 of this Prudential Standard.
3.             This Prudential Standard does not apply to:
(a)          purchased payment facility providers; or
(b)          foreign ADIs that are subject to consolidated supervision by their home country supervisors in respect of credit concentrations and large exposure limits. However, foreign ADIs must detail their large exposure and risk concentration policies as 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