Recovery and exit planning

13. An APRA-regulated entity must develop and maintain a recovery and exit plan that sets out how it would respond to a stress that threatens its viability. The recovery and exit plan must demonstrate how the APRA-regulated entity could:

(a) take actions to recover its financial resilience; and

(b) enable its orderly and solvent exit from regulated activity, if actions to recover financial resilience are not effective.

14. The recovery and exit plan must be appropriate to the size, business mix and complexity of the APRA-regulated entity and, for an RSE licensee, the RSE licensee’s business operations.

15. The recovery and exit plan must be integrated into the APRA-regulated entity’s:

(a) risk management framework;[7]

(b) capital management and liquidity management frameworks, as relevant for an APRA-regulated entity other than an RSE licensee; and

(c) business plan and business performance review for an RSE licensee.[8]

16. An APRA-regulated entity must not assume extraordinary public sector support in its recovery and exit planning.