This Prudential Standard requires an authorised deposit-taking institution to hold sufficient regulatory capital against its operational risk exposures. The key requirement of this Prudential Standard is that an authorised deposit-taking institution that is a significant financial institution must calculate its capital requirement for operational risk based on its business indicator, a financial statement-based proxy of its operational risk exposure.

This Reporting Standard outlines the overall requirements for the provision of information to APRA in relation to an authorised deposit-taking institution’s operational risk regulatory capital under the advanced measurement approaches to operational risk defined in Prudential Standard APS 115 Capital Adequacy: Advanced Measurement Approaches to Operational Risk.