In a significant move aimed at refining the financial landscape, the Australian Prudential Regulation Authority (APRA) is ushering in a new era of operational risk management for the regulated entities. Announced on February 19, 2024, APRA has embarked on a three-month consultation period, open until May 13, 2024, inviting feedback on its proposed amendments to Prudential Standard SPS 114 and its associated guidance. This initiative marks a pivotal shift towards a simplified operational risk financial requirement (ORFR) framework, promising enhanced efficiency and resilience among super funds, trustees, and RSE licensees.
Introducing a Simplified ORFR Framework
In its quest to bolster financial stability, APRA is advocating for a leaner approach to managing operational risks. The proposed changes are designed to integrate seamlessly with CPS 230 while maintaining the existing guideline target amount of 25 basis points of Funds Under Management (FUM). This streamlined methodology is not only expected to provide RSE licensees with better access to financial resources but also to encourage a more proactive engagement in risk…
