APRA issues draft conglomerate standard

The Australian Prudential Regulation Authority will develop standardised reporting requirements for only one of the four components of its conglomerate framework. Yesterday, the regulator issued two draft reporting requirements in relation to capital adequacy.

APRA said it did not plan to have standardised reporting for the other components of the conglomerate framework - governance, risk exposures and risk management. It plans to develop bespoke reporting requirements to deal with these components.

It may reconsider the appropriateness of standard reporting requirements relating to a conglomerate's aggregate risk exposure at a later date.

Conglomerates, which APRA also refers to as Level 3 groups, are institutions that conduct business in more than one APRA-regulated industry. Compliance with conglomerate prudential standards will be required from January 2015.

APRA proposes to collect reports on capital adequacy quarterly.

Data collections will be subject to audit. The information provided by a conglomerate must be the product of systems, procedures and internal controls that have been reviewed and tested by an appointed auditor.

There will be no statistical publications on conglomerates. APRA said there were only a limited number of conglomerate groups and the heterogeneous nature of their businesses did not lend itself to standardised statistical publications.