Attachment A - GroupsAttachment A - Groups

Attachment A - Groups

Conglomerate group for ADIs

1. A conglomerate group is a group of companies that are related to each other within the meaning of section 50 of the Corporations Act where the group includes one or more ADIs that have been incorporated within Australia.

2. Subject to paragraph 3 of this Attachment, unless determined in writing by APRA, a conglomerate group must be headed by an ADI or an authorised NOHC and may include non-financial (commercial) as well as financial entities (regulated and unregulated). A reference to a regulated entity in a conglomerate group refers to any entity directly regulated by APRA or by an equivalent banking or insurance prudential regulator overseas.

3. A foreign-owned locally incorporated ADI and its subsidiaries will constitute a conglomerate group for the purposes of this Prudential Standard. However, where a foreign-owned ADI has a locally incorporated NOHC parent, the conglomerate group will comprise the locally incorporated NOHC (even if it is not an authorised NOHC) and all its subsidiaries. The ADI’s foreign parent(s), the foreign parent’s overseas-based subsidiaries and their directly owned non-ADI entities operating in Australia will not form part of the conglomerate group. APRA, however, expects the foreign parent to be subject to regulatory oversight broadly consistent with that applied by APRA and, if requested by APRA, to provide APRA with information concerning activities of its subsidiaries outside the Australian conglomerate group.

Non-consolidated subsidiaries for ADIs

1. For the purposes of determining an ADI’s capital adequacy at Level 2, all banking and other financial activities (subject to paragraph 5 of this Attachment), both regulated and unregulated, conducted within the banking group must be consolidated.
2. Consolidation at Level 2 must cover the global operations of:
   1. an ADI and all its subsidiaries; or
   2. where an ADI is a subsidiary of an authorised NOHC, the ADI’s immediate parent NOHC and all the immediate parent NOHC’s subsidiaries,

as well as any other controlled banking entities, securities entities and other financial entities, except for entities involved in the following business activities:

1. insurance (including friendly societies and health funds);
2. acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds management;
3. non-financial (commercial) operations; and
4. securitisation special purpose vehicles, to which assets have been transferred in accordance with the operational requirements for regulatory capital relief outlined in Attachment A of Prudential Standard APS 120 Securitisation.