In September 2019, APRA advised regulated entities of its plans to make a minor amendment to Prudential Standard CPS 226 Margining and risk mitigation for non-centrally cleared derivatives (CPS 226). APRA noted that it would add the UK’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) to the list of foreign regulators in Attachment D of CPS 226, if APRA assessed that the UK regulators’ new margining rules were equivalent to APRA’s requirements.
APRA’s assessment is that the PRA and FCA’s new margin requirements are equivalent to those set out in CPS 226. APRA has added the UK’s PRA and FCA to the list of foreign regulators whose margin requirements are eligible for substituted compliance with the margin requirements in CPS 226. This change will allow APRA-regulated entities to rely on UK rules when transacting with counterparties that are subject to the new UK margining rules.