Shortfall management

1. Where the level of ORFR financial resources falls below the tolerance limit, an RSE licensee must implement a replenishment plan and replenish the ORFR financial resources. Replenishment must occur within a period and in a manner the RSE licensee determines will ensure that the RSE licensee acts fairly in dealing with beneficiaries and minimises the risk of adverse outcomes for beneficiaries.[7] The replenishment plan must, at a minimum, explain:
   1. how the shortfall has arisen;
   2. the amounts that apply in relation to each RSE;
   3. how the RSE licensee will replenish the ORFR financial resources, including the source of funding; and
   4. the expected date for the RSE licensee to again meet the ORFR target amount.
2. An RSE licensee’s replenishment plan must be approved by the Board prior to implementation.
3. APRA may require an RSE licensee to revise its replenishment plan if APRA considers that the plan does not comply with the RSE licensee’s duties and obligations.