Revisions to the capital framework for authorised deposit-taking institutions
APRA is consulting on revisions to the capital framework for authorised deposit-taking institutions (ADIs) to implement ‘unquestionably strong’ capital ratios and the Basel III reforms.
September 2023
Consultation on changes to Reporting Standard ARS 180 Capital Adequacy: Counterparty Credit Risk
On 11 September, APRA released a consultation on its proposed changes to Reporting Standard ARS 180.0 Counterparty Credit Risk (ARS 180.0). These include amending ARS 180.0 to align reporting requirements for non-significant financial institutions (non-SFIs) with APRA’s previous prudential guidance and the creation of a new reporting standard ARS 226.0 Margining and risk mitigation for non-centrally cleared derivatives (ARS 226.0) for the Reporting Form ARF 226.0 Margining and risk mitigation for non-centrally cleared derivatives (ARF 226.0) which is currently located in ARS 180.0.
APRA requests industry feedback on the proposed changes by 22 September 2023.
A letter to industry on this consultation, clean and marked-up versions of the draft revised ARS 180, and the draft new reporting standard ARS 226.0 are available below.
Letter
Proposed changes to Reporting Standard ARS 180.0 Counterparty Credit Risk
Reporting standards
Published 11 September 2023 | Published 11 September 2023 |
November 2022
On 28 November, APRA released a response to consultation on its proposed revisions to Prudential Standard APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book (APS 117).
APS 117 sets out the requirements that an ADI must meet in managing its interest rate risk in the banking book (IRRBB) risk. As part of this response paper, APRA is also consulting on new proposed revisions to APS 117, which are designed to reduce volatility in the IRRBB capital charge calculation as well as creating better incentives for ADIs in managing their IRRBB risk. As part of this consultation, APRA is also seeking feedback on the capital treatment of cash flow hedge reserves and associated tax effects.
APRA requests industry feedback on the new proposed revisions by 1 March 2023.
The response paper, clean and marked-up versions of the draft revised APS 117 and non-confidential submissions are available below
Response paper
Prudential standards
Non-confidential submissions
October 2022
On 31 October 2022, APRA released consequential amendments arising from the capital reforms for authorised deposit-taking institutions. The consequential amendments ensure consistency of APRA’s broader prudential framework with the capital reforms. Alongside the minor amendments, APRA is releasing a letter that outlines feedback from the July 2022 consultation and summarises the amendments.
The letter to industry, marked up and clean versions of the updated prudential standards, prudential practice guides and reporting standards, and a non-confidential submission can be found below:
Letter
ADI capital reforms: Consequential amendments
Prudential standards
Clean versions
Marked up versions
Reporting standards
Clean versions
Marked up versions
Prudential practice guides
Clean versions
Marked up versions
Non-confidential submission
September 2022
On 28 September 2022, APRA published the following Reporting Standard taxonomy artefacts:
- Reporting Standard ARS 110.0 Capital Adequacy - draft taxonomy artefacts
- Reporting Standard ARS 112.0 Capital Adequacy: Standardised Approach to Credit Risk - revised draft taxonomy artefacts
- Reporting Standard ARS 113.0 Capital Adequacy: Internal Ratings-based Approach to Credit Risk - revised draft taxonomy artefacts
- Reporting Standard ARS 115.0 Capital Adequacy: Advanced Measurement Approaches to Operational Risk - final taxonomy artefacts
Draft taxonomy artefacts
APRA has also invited ADIs to a webinar demonstrating the new collections designed for the new capital framework on 13 October 2022. The new collections will be available in the test environment from mid-October.
August 2022
On 10 August 2022, APRA released the final reporting standards that accompany the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions.
The package published today responds to the consultation released in April 2022 on APRA’s proposed new and updated reporting standards.
APRA is also publishing below taxonomy artefacts for Reporting Standard ARS 112.0 Capital Adequacy: Standardised Approach to Credit Risk and Reporting Standard ARS 113.0 Capital Adequacy: Internal Ratings-based Approach to Credit Risk.
The letter to industry, final reporting standards, draft taxonomy artefacts and non-confidential submissions can be found below:
Letter
Letter to ADIs: Credit risk reporting – Response to submissons
Reporting Standards
Published 10 August 2022 | Published 10 August 2022 |
Published 10 August 2022 | Published 10 August 2022 |
Published 10 August 2022 | Published 10 Augusf 2022 |
Published 10 August 2022 | Published 10 August 2022 |
Draft taxonomy artefacts
Non-confidential submissions
July 2022
On 26 July 2022, APRA released the final prudential practice guides (PPGs) that accompany the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions.
APRA is also releasing an updated version of Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113) with minor amendments resulting from the consultation on the guidance.
APRA is also initiating consultation on consequential amendments arising from the capital reforms to Prudential Standard APS 120 Securitisation (APS 120), Prudential Standard APS 180 Capital Adequacy: Counterparty Credit Risk (APS 180) and Prudential Standard APS 210 Liquidity (APS 210).
Written submissions on the amendments are requested by 26 August 2022.
Alongside the final PPGs, APRA is releasing a response to submissions paper that provides a more detailed response to technical issues raised in the November 2021 consultation.
The response paper, final guidance, updated APS 113 and non-confidential submissions can be found below:
Response paper
Final prudential practice guide
Published 26 July 2022 | Published 26 July 2022 |
Prudential standard
Submissions
April 2022
On 7 April 2022, APRA released for consultation interim reporting standards that will accompany the updated prudential standards for capital adequacy and credit risk capital. In addition, APRA also released three reporting standards for consultation that contain consequential changes as a result of updates to ADI capital adequacy and credit risk capital requirements and other minor changes.
Written submissions are requested by 7 June 2022.
The letter to industry and marked up and clean versions of the reporting standards can be found below:
Letter
Reporting standard
Published 7 April 2022 | Published 7 April 2022 |
Published 7 April 2022 | Published 7 April 2022 |
Published 7 April 2022 | Published 7 April 2022 |
Published 7 April 2022 | |
January 2022
On 20 January 2022, APRA released for consultation an update to the reporting schedule for Reporting Standard ARS 115.0 Capital Adequacy: Standardised Measurement Approach to Operational Risk (ARS 115.0) to simplify reporting requirements for ADIs.
The letter to industry and marked up and clean versions of the reporting standard can be found below:
Letter
Reporting standard
November 2021
On 29 November 2021, APRA released the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions, contained in Prudential Standard APS 110 Capital Adequacy (APS 110), Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112) and Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113).
Alongside the final prudential standards, APRA is releasing two papers: an information paper that outlines the objectives of the new capital framework, and a response to submissions paper that provides a more detailed response to technical issues raised in the December 2020 consultation.
APRA is also releasing for consultation draft guidance on the new framework, contained in Prudential Practice Guide APG 110 Capital Adequacy (draft APG 110), Prudential Practice Guide APG 112 Capital Adequacy: Standardised Approach to Credit Risk (draft APG 112) and Prudential Practice Guide APG 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (draft APG 113).
Written submissions on the draft guidance are requested by 11 March 2022.
The information paper, response paper, final standards, draft guidance and non-confidential submissions can be found below:
Information paper
Response paper
Prudential standards
Draft guidance
Non-confidential submissions
October 2021
On 27 October 2021, APRA released a letter to industry to provide an update on its timelines to review the prudential standards for market risk next year and implications for the broader capital framework.
The letter to industry can be found below:
Review of ADI market risk standards
July 2021
Release of letter on ADI capital reforms: Update on policy settings
On 21 July 2021, APRA released a letter to industry on the ADI capital reforms to provide an update on policy settings, which will be used in a quantitative impact study.
The letter to industry can be found below:
Letter to ADIs: ADI capital reforms: Update.
June 2021
Release of letter on implementation of ADI capital reforms: roadmap to 2023
On 2 June 2021, APRA released a letter to industry on the implementation of the ADI capital reforms to provide a roadmap on the finalisation of the reforms and upcoming releases.
The letter to industry can be found below:
Letter to ADIs: ADI capital reforms: Roadmap to 2023.
March 2021
Release of finalised reporting standard for ARS 115.0 Capital Adequacy
On 3 March 2021, APRA released a response to submissions on proposed changes to Reporting Standard ARS 115.0 Capital Adequacy: Standardised Measurement Approach to Operational Risk (ARS 115.0). The response includes final operational risk reporting requirements for authorised deposit-taking institutions which are contained in ARS 115.0.
The response letter and clean and marked-up copies ARS 115.0 can be found below:
December 2020
Response papers
The December 2020 consultation includes APRA's responses to the August 2018 consultation on improving the transparency, comparability and flexibility of the ADI capital framework, the June 2019 consultation on the revisions to the ADI capital framework and the November 2019 consultation on the leverage ratio requirement for ADIs.
Due to the number of consultations APRA is responding to in this package, there are two papers: a discussion paper that provides a high level overview of APRA's proposals and their indicative impacts, and a response to submissions paper that provides a more detailed response to technical issues raised in the prior consultations.
APRA is also releasing for consultation full drafts of Prudential Standard APS 110 Capital Adequacy, Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk and Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk.
Written submissions on these drafts standards are requested by 1 April 2021.
The response papers and draft standards can be found below:
Published 8 December 2020 | Published 8 December 2020 |
Published 8 December 2020 | Published 8 December 2020 |
Published 8 December 2020 |
December 2019
Release of final prudential standard APS 115 and consultation on draft reporting standard ARS 115.0
On 11 December 2019, APRA released the final operational risk requirements for authorised deposit-taking institutions (ADIs) which are contained in Prudential Standard APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk (APS 115).
In addition, APRA has commenced consultation on a new reporting standard ARS 115.0 Capital Adequacy: Standardised Measurement Approach to Operational Risk (ARS 115.0), which will collect data from ADIs reflecting the prudential requirements set out in APS 115.
Written submissions on draft ARS 115.0 are requested by 21 February 2020.
The response letter, APS 115 and draft ARS 115.0 can be found below:
Release of final Prudential Standard APS 115 and draft Reporting Standard ARS 115.0 for comment
September 2019
Response paper on interest rate risk in the banking book requirements
The September 2019 consultation includes APRA’s response to the submissions received in relation to its initial proposals on the revised interest rate risk in the banking book (IRRBB) requirements, and commences a detailed consultation on other amendments to strengthen the IRRBB prudential framework. It also includes a draft Prudential Standard APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book.
Written submissions are requested by 6 December 2019.
June 2019
Response paper
The June 2019 consultation includes APRA’s response to its initial proposals on revised credit risk and operational risk requirements, and simpler prudential requirements for small, less complex ADIs. It also includes draft prudential standards APS 112 Capital Adequacy Standardised Approach to Credit Risk, APS 113 Capital Adequacy Internal Ratings-based Approach to Credit Risk (residential mortgages extract only) and APS 115 Capital Adequacy Standardised Measurement Approach to Operational Risk.
Written submissions are requested by 6 September 2019.
Submissions
August 2018
Discussion paper
Submissions
We received the following non-confidential submissions in response to the consultation on revisions to the capital framework for ADIs in November 2018:
February 2018
Consultation on revisions to the capital framework for ADIs
The February 2018 consultation outlined APRA’s initial proposals on revisions to credit risk, operational risk and market risk requirements, as well as proposals for simpler prudential requirements for small, less complex ADIs.
Submissions
We received the following non-confidential submissions in response to the consultation on revisions to the capital framework for ADIs in February 2018:
Note on submissions
It is APRA's policy to publish all submissions on the APRA website unless the respondent specifically tells APRA in writing that all or part of the submission is to remain confidential. An automatically generated confidentiality statement in an email does not satisfy this purpose. If you would like only part of your submission to be confidential, you should provide this information marked as 'confidential' in a separate attachment.