The Australian Prudential Regulation Authority (APRA) has released a cross-industry consultation on minor amendments to align and centralise the definition of a significant financial institution (SFI) within the prudential framework for ADI’s, general insurers and life companies, private health insurers and Registrable Superannuation Entities.
Currently smaller and less complex entities are subject to simpler requirements than entities with assets above a certain size or entities determined as such by APRA, taking into account matters such as complexity and group membership.
Under the proposed approach, all prudential standards would use the same definition of an SFI.
The proposed new definition is:
“Significant financial institution means an APRA-regulated entity that is either:
a) not a foreign ADI, a Category C insurer or an eligible foreign life insurance company(EFLIC), and has total assets in excess of:
(i) AUD $20 billion in the case of an ADI;
(ii) AUD $10 billion in the case of a general insurer or life company;
(iii) AUD $3 billion in the case of a private health insurer; or
(iv) AUD $30 billion in the case of a single RSE operated by an RSE licensee, or if the RSE licensee operates more than one RSE where the combined total assets of all RSEs exceeds this amount; or
b) determined as such by APRA, having regard to matters such as the complexity in its operations or its membership of a group.”
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
