Application 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), including foreign ADIs, and non-operating holding companies authorised under the Banking Act (authorised banking NOHCs);

(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 in respect of their business operations.[1]

3. The obligations imposed by this Prudential Standard on, or in relation to, a foreign ADI, a Category C insurer or an EFLIC apply only in relation to the Australian branch operations of that entity.

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). This Prudential Standard applies to SFIs, and non-SFIs determined by APRA to provide critical functions.

5. Where an APRA-regulated entity is the Head of a group,[2], [3] 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,[4] including in relation to entities that are not APRA-regulated; and

(c) on a group basis.

6. In applying the requirements of this Prudential Standard on a group basis, references to an ‘APRA-regulated entity’ must be read as ‘Head of a group’ and references to ‘entity’ must be read as ‘group’.

7. This Prudential Standard commences on 1 January 2024. An APRA-regulated entity will be subject to the requirements of this Prudential Standard following notification from APRA.