APRA has finalised the definition of a significant financial institution (SFI) as used in the prudential standards.

APRA plans to use the centralised definition of an SFI, where appropriate, to differentiate prudential requirements between large and small entities.

APRA’s risk-based approach to supervision means that large or complex entities are also held to a higher baseline level of supervisory intensity.

APRA has recently used the SFI definitions in simplifying requirements for smaller and less complex entities in prudential standards for remuneration and ADI capital adequacy, and in draft prudential standards for financial contingency and resolution planning.

Significant financial institution means an APRA-regulated entity that is either:

a) not a foreign ADI, a Category C insurer or an eligible foreign life insurance company (EFLIC), and has total assets in excess of:

(i) AUD $20 billion in the case of an ADI;
(ii) AUD $10 billion in the case of a general insurer or life company;
(iii) AUD $3 billion in the case of a private health insurer; or
(iv) AUD $30 billion in the case of a single RSE operated by an RSE licensee, or if the RSE licensee operates more than one RSE where the combined total assets of all RSEs exceeds this amount; or

b) determined as such by APRA, having regard to matters such as the complexity in its operations or its membership of a group.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.