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Author: Admin | 2025-04-28
Remuneration policy inforce which requires that variable remuneration be proportionallyreduced to reflect a failure in an accountable person to fulfiltheir obligations under BEAR. BEAR is proposed to be extended toall APRA-regulated entities under FAR from the later of 1 July 2023and 18 months after the commencement of FAR—see previousJones Day Commentary here.The finalised CPS 511 will require (i) entities to applymaterial weight to nonfinancial metrics (such as customercomplaints, breaches, and regulatory and audit findings) whendetermining variable remuneration for employees; (ii) entities toreduce variable remuneration, potentially to zero, when warrantedby poor risk conduct; (iii) new minimum deferral requirements forvariable remuneration; and (iv) increased board oversight,transparency, and accountability on remuneration outcomes. CPS 511will come into effect from 1 January 2023 for large ADIs, with aphased implementation for other APRA-regulated entities. APRA'smedia release can be found here.APRA Releases Update on Key Policy Settings for ADI CapitalFramework ReformsOn 21 July 2021, APRA released a letter to ADIs to provide anupdate on key policy settings for the capital framework reforms,which aim to strengthen the financial resilience of the industry.In summary, as part of the capital framework reforms APRA intendsto (i) maintain the approach to capital buffers outlined in theconsultation package, including a base level for thecounter-cyclical capital buffer, or CCyB, of 1.0% of risk-weightedassets, or RWAs; (ii) modify the proposed capital requirements forhigher risk residential mortgage lending, with changes to thedefinition of long-term, interest-only loans; and (iii) revisecertain settings to calibrate the new framework to meet theunquestionably strong benchmarks, and simplify requirements wherepossible. The capital framework reforms will come into effect from1 January 2023. APRA's letter to ADIs can be found here. We discussed the ADI capital reforms in aprevious Update which can be found here.APRA Announces Further Regulatory Support for Loans Impacted byCOVID-19On 19 July 2021, APRA announced further regulatory support forADIs offering temporary
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