Banking (prudential standard) determination No. 11 of 2022 (Cth)

Banking (prudential standard) determination No. 11 of 2022

Prudential Standard APS 121 Covered Bonds

Banking Act 1959

I, Renée Roberts, a delegate of APRA:

(a) under subsection 11AF(3) of the Banking Act 1959 (the Act) REVOKE Banking (prudential standard) determination No. 1 of 2019, including Prudential Standard APS 121 Covered Bonds, made under that determination; and

(b) under subsection 11AF(1) of the Act DETERMINE Prudential Standard APS 121 Covered Bonds, in the form set out in the schedule, which applies to all ADIs to the extent provided in paragraph 2 of the prudential standard.

This instrument commences on 1 January 2023.

Dated: 1 December 2022

[Signed]

Renée Roberts Executive Director Policy and Advice Division

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

ADI has the meaning given in section 5 of the Act.

Schedule

Prudential Standard APS 121 Covered Bonds comprises the document commencing on the following page.

Prudential Standard APS 121

Covered bonds Objectives and key requirements of this Prudential Standard This Prudential Standard sets out requirements for the issuing of covered bonds by authorised deposit‑taking institutions (ADIs). Ultimately, the Board of an ADI is responsible for ensuring that the ADI adopts prudent practices when issuing covered bonds and managing the risks associated with exposure to a covered bond special purpose vehicle. The key requirements of this Prudential Standard are that an authorised deposit-taking institution must: * adopt policies and procedures to manage risks relating to its issuance of covered bonds; and * apply an appropriate capital treatment to exposures associated with covered bond issuance. This Prudential Standard should be read in conjunction with Division 3A of Part II of the Banking Act 1959, which sets out the legislative framework for covered bonds.