APRA Prudential Standard 3PS 221 Aggregate Risk Exposures

By : 6clicks
This Prudential Standard requires a Level 3 Head to ensure that an aggregate risk exposure external to the Level 3 group does not expose prudentially regulated institutions within the group to excessive risk. The ultimate responsibility for the aggregate risk exposure policy of a Level 3 group rests with the Board of its Level 3 Head.
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Prudential Practice Guides (PPGs) provide guidance on APRA’s view of sound practice in particular areas. PPGs frequently discuss legal requirements from legislation, regulations or APRA’s prudential standards, but do not themselves create enforceable requirements.

Prudential Standard 3PS 221 Aggregate Risk Exposures (3PS 221) sets out APRA’s requirements in relation to the aggregation of risks across a Level 3 group. This PPG aims to assist Level 3 Heads to comply with those requirements and, more generally, to outline prudent practices in relation to certain aggregation matters.

Subject to the requirements of 3PS 221, a Level 3 Head has the flexibility to structure its risk aggregation capabilities in the way most suited to achieving its business objectives. Not all practices outlined in this PPG will be relevant for every Level 3 Head and some aspects may vary depending upon the size, business mix and complexity of the Level 3 group’s business operations

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Jurisdiction Australia
Type Laws or related obligations