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Review of Prudential Standard APS 111 Capital Adequacy

Independent Review – Australian Prudential Regulation Authority

On 5 August 2021, the Australian Prudential Regulation Authority (APRA) announced a final revised Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111).

The updates to the Prudential Standard on capital adequacy are designed to reinforce financial system resilience, promote simple and transparent capital issuance through removing the allowance for the use of special purpose vehicles (SPVs) in regulatory capital issuance, and clarify aspects of APS 111 to assist Authorised Deposit-Taking Institutions issue capital instruments.

Consistent with the Government’s Regulation Impact Statement (RIS) requirements, a consultation discussion paper, one response to submissions document, and a letter including some impacts analysis have been certified by APRA as meeting the requirements of a RIS. The Office of Best Practice Regulation (OBPR) does not assess the quality of independent reviews and RIS-like documents used in lieu of a RIS, but does assess whether the options analysed in the independent review are relevant to the regulatory proposal. The OBPR assessed that the options analysed in the independent review are sufficiently relevant to the regulatory proposal.

The agency estimates the average annual regulatory cost at $0.743 million.

Please note: any accessibility queries should be directed to APRA.

Attachment File type Size
Certification Letter docx 745.09 KB
Certification Letter pdf 261.3 KB
Discussion Paper docx 371.54 KB
Discussion Paper pdf 351.58 KB
Letter to ADIs docx 832.27 KB
Letter to ADIs pdf 272.47 KB
Response to Submissions docx 373.34 KB
Response to Submissions pdf 629.68 KB