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Response to consultation on proposed changes to credit risk reporting standard

This image shows APRA's contact details: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY - 1 Martin Place (Level 12), Sydney, NSW 2000 - GPO Box 9836, Sydney, NSW 2001. Telephone: 02 9210 3000, Website: Australian coat of arms - APRA

To: All authorised deposit-taking institutions


On 11 September 2023, APRA consulted affected ADIs on proposed changes to Reporting Standard ARS 180.0 Counterparty Credit Risk (ARS 180.0) and the creation of the new Reporting Standard ARS 226.0 Margining and risk mitigation for non-centrally cleared derivatives (ARS 226.0). 

APRA received one submission, which has been published on APRA’s website. The submission was supportive of the changes to the reporting standards but suggested broader changes to APRA’s reporting framework to further embed a proportionate approach to regulation. 

The submission recommended replacing the two tiers of significant financial institutions (SFI) and non-SFIs with additional and more granular tiering. The submission stated this approach would better reflect the nuanced approach required to adequately implement proportional regulation. In line with APRA’s approach to proportionality in its prudential and reporting frameworks, APRA is retaining the SFI and non-SFI categorisation for ARS 180.0. 

A review of the SFI and non-SFI frameworks would impact several prudential standards, including cross-industry standards for remuneration, recovery and exit planning, and resolution planning. APRA notes the feedback provided by this submission and will consider this as part of broader considerations on the design of proportionality in the prudential framework.

APRA considers the reporting standards released on 11 September 2023 to be final and will determine the revised ARS 180.0 and the new reporting standard ARS 226.0 such that they will be effective from the reporting period ending 30 September 2023. As discussed in the consultation letter, this will not result in a change to the current reporting requirements, due to the current reporting arrangements already in place.

Yours sincerely,

Andrew Robertson
Acting Chief Data Officer
Technology and Data Division