Application, definitions and commencement

2. Subject to paragraphs 3 and 4, this Prudential Standard applies to all APRA-regulated entities, defined as:

(a) authorised deposit-taking institutions (ADIs) and non-operating holding companies authorised under the Banking Act (authorised banking NOHCs), but excluding purchased payment facility providers;

(b) general insurers, including Category C insurers, non-operating holding companies authorised under the Insurance Act (authorised insurance NOHCs), and parent entities of Level 2 insurance groups;

(c) life companies, including friendly societies and eligible foreign life insurance companies (EFLICs), and registered NOHCs;

(d) private health insurers; and

(e) RSE licensees under the SIS Act in respect of their business operations.[1]

3. The obligations imposed by this Prudential Standard on, or in relation to, a Category C insurer or an EFLIC apply only in relation to the Australian branch operations of that entity. This Prudential Standard does not apply to a foreign ADI unless APRA determines that all or part of this Prudential Standard applies to the Australian branch operations of the foreign ADI.[2]

4. For the purposes of this Prudential Standard, an APRA-regulated entity is either a significant financial institution (SFI) or a non-significant financial institution (non-SFI). Unless APRA determines otherwise in a particular case,[3] the requirements of this Prudential Standard apply to SFIs and non-SFIs as indicated.

5. For the purposes of this Prudential Standard, an SFI means, in relation to RSE licensees, an RSE licensee that either:

(a) has total assets in excess of 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 exceed this amount; or

(b) is determined as such by APRA, having regard to matters such as complexity in its operations or its membership of a group.

A non-SFI means, in relation to RSE licensees, an RSE licensee that is not an SFI.[4]

6. Where an APRA-regulated entity is the Head of a group,[5] it must comply with an applicable requirement of this Prudential Standard:

(a) in its capacity as an APRA-regulated entity;

(b) by ensuring that the requirement is applied appropriately throughout the group,[6] including in relation to entities that are not APRA-regulated; and