Document ID: chunk:federal_register_of_legislation:F2023L01572:front:0:p16
Version: federal_register_of_legislation:F2023L01572
Segment Type: other
Provision Reference: 
Character Range: 40654–43630

to a securitisation.

Self-assessment
73.         An ADI must assess, in writing, each securitisation in which it participates. The assessment must demonstrate compliance with this Prudential Standard including, where relevant, the applicable regulatory capital treatment. An ADI must provide to APRA, upon request, copies of an assessment and any documentation (e.g. transaction and disclosure documentation) as well as any legal or accounting advice associated with its participation in the securitisation.
74.         An originating ADI must designate a securitisation at inception as eligible for regulatory capital relief or as funding-only. An originating ADI must meet all requirements for either regulatory capital relief (including significant credit risk transfer) or for funding-only, from the inception of the securitisation upon such designation. An originating ADI must not switch treatment after designation, unless it switches from a funding-only securitisation to a securitisation for regulatory capital relief where it meets all the requirements for regulatory capital relief, including significant credit risk transfer.

Transitional provisions
75.         For the purposes of these transitional provisions, 'the previous APS 120' means Prudential Standard APS 120 Securitisation made on 3 December 2014 by Banking (prudential standard) determination No. 7 of 2014.
76.         An originating ADI may continue to exclude the underlying pool of exposures in the calculation of its regulatory capital for credit risk under APS 112 or APS 113 where the securitisation was in existence immediately prior to 1 January 2018 and in relation to which the originating ADI complied with the operational requirements for regulatory capital relief of the previous APS 120. It may do so only until the first date at which a clean-up call may be exercised.[26]
77.         For any services or facilities agreements which were in existence immediately prior to 1 January 2018 and in relation to which the ADI complied with the previous APS 120, the ADI may treat the services or facilities agreement as if the provisions of Attachment D of this Prudential Standard that are applicable to facilities and services agreements are met. It may do so only until either:
(a)          the termination of the agreement; or
(b)          the first date upon which the agreement may be renewed or cancelled, at the option of the parties to the agreement.
78.         For the avoidance of doubt, an ADI eligible for transition under paragraphs 76 and 77 must hold regulatory capital in respect of credit risk for any facilities or exposures to an SPV in accordance with Attachment C.

Prior notification
79.         Prior to entering into a funding arrangement involving an ADI providing another party an interest in the ADI's assets, the ADI must notify APRA of the proposed arrangement, except in relation to:
(a)          a covered bond issued consistent with Division 3A of Part II