find the latest legal job
Senior Associate - Competition, Policy & Regulatory
Category: Other | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Work with a well regarded Partner · Sydney CBD
View details
Commercial Litigation Senior Associate
Category: Litigation and Dispute Resolution | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Lawyers Weekly Australia Partner of the Year 2016, Insolvency
View details
MULTIPLEX Regional Legal Counsel (Vic) | 7 to 10 years + PQE
Category: Generalists - In House | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Career defining in-house role · Tier One international contractor
View details
Junior Lawyer - Personal Injury Law
Category: Personal Injury Law | Location: Parramatta & Western Suburbs Sydney NSW
· Highly specialized practice · Challenging role with great opportunities
View details
IR Advisor/Member Advocate
Category: Industrial Relations and Employment Law | Location: St Leonards NSW 2065
· Permanent (0.8-1.0 FTE) role in a developing team
View details
APRA yields on Basel II standard

APRA yields on Basel II standard

THE PRUDENTIAL regulator says it will be taking a more risk-based approach under the new standard on securitisation released at the end of last year, but will focus more closely on this area in…

THE PRUDENTIAL regulator says it will be taking a more risk-based approach under the new standard on securitisation released at the end of last year, but will focus more closely on this area in onsite visits.

On the release of the final version of the Basel II prudential standards, Heidi Richards, general manager of the Australian Prudential Regulation Authority (APRA), also said despite the 1 January deadline for compliance with the new capital requirements, they were allowing institutions until mid-2008 to assess the new “operational aspects” of the APS 120 securitisation standard.

APS 120 now incorporates the Basel II capital calculations for standardised and internal ratings-based (IRB) approaches to credit risk capital as well as the other Basel II and pre-existing APRA requirements.

Richards said APRA was unique among prudential regulators in its practice of pre-vetting all securitisation deals by financial institutions.

“As you can imagine this is very time consuming for APRA and for ADIs [authorised deposit-taking institutions] wishing to get issues to market. It has had the side benefit of allowing APRA to become quite familiar with all of the structures in the market issued by regulated institutions, and in enforcing a certain amount of consistency,” she told the Australian Securitisation Conference.

“However, in my view transaction-based approvals are not really consistent with being a risk-based prudential supervisor.”

Instead, APRA will obtain regular statistical reporting on securitisation activity, and won’t issue letters confirming compliance with APS 120 unless it has concerns about activity that is not covered by the standard. “APRA supervisors will, however, be covering securitisation more thoroughly in onsite visits, and will review self assessments in that context,” she said.

As the enforcement of the standard will rely more on self-assessment from now on, Richards said they expected to well-developed risk management and compliance policies and procedures for securitisation activities.

“These would be designed to provide assurance that an ADI is complying with its contractual obligations, managing all contracted risks and not providing implicit support to its programs.”

Richards said they had allowed extra time to consider the implications of the operational aspects of the new standard because it had been released so close to the 1 January deadline.

Once institutions have made their assessment, they can then apply for transitional relief of up to two years.

However, she stressed all other Basel II requirements apply from 1 January, including the new securitisation capital calculations for standardised and internal ratings based banks. “The transition relief applies only to changes to operational aspects of the standard, such as clean sale provisions and facility criteria, and only to pre-existing programs and facilities, that is, those issued before 1 January,” she said.

See Risk Management magazine. www.riskmanagementmagazine.com.au

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

APRA yields on Basel II standard
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Handshake
07:00
Silk picked to monitor national security laws
Dr James Renwick SC has been appointed as Independent National Security Legislation Monitor after se...
Two businessman, growth
Sep 19 2017
Aus catching up on international arbitration front
Australia is starting to see a spike in international arbitration with this set to continue over the...
Prison
Sep 19 2017
Manson family killer suffered ‘miscarriage of justice’: former lawyer
A retired Australian barrister has published a book on the Manson Family murders of 1969 and called ...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...