3.1. Introduction

(1) This Chapter sets out the prudential reporting requirements for a Bank.

(2) The prudential returns of a Bank must reflect its management accounts, financial statements and ancillary reports. A Bank’s prudential returns, accounts, statements and reports must all be prepared using the same standards and practices and must be easily reconcilable with one another.

(3) A prudential return is referred to as a Solo prudential return if it reflects the individual Bank’s accounts, statements and reports.

(4) A Consolidated prudential return means a prudential return which reflects the accounts, statements and reports of a Bank consolidated with those of the other members of its Financial Group. Note Financial Group is defined in Chapter 10 of BBR and is used for consolidated reporting instead of ‘corporate group’.

3.2 Information about Financial Group

If directed by the AFSA, a Bank must give the AFSA the following information about its Financial Group:

• (a) details about the entities in the group;
• (b) the structure of the group;
• (c) how the group is managed;
• (d) any other information that the AFSA requires.

Note The processes and procedures relating to flow of management information, decision-making, oversight, control and review of the operations and activities of the group are collectively referred to as managing the group in (c) above.

3.3. Financial Group risk

(1) If a Bank is part of a Financial Group, Credit Risk, market risk, operational risk, Interest Rate Risk in the Banking Book (IRRBB) and liquidity risk exposures (collectively referred to as prudential risk exposures) apply on a consolidated basis to the Bank and the other members that constitute its Financial Group.

(2) Preparing returns on a consolidated basis means including the financial effects and risk exposures arising from all the activities of all the members or entities forming part of the Bank’s Financial Group. Such returns are not restricted to just reflecting the financial activities or positions of the Bank.

Note: A Bank is required to have systems to enable it to calculate its financial group capital requirement and resources, according to rules in Chapter 10 of the BBR.

3.4. Preparing returns

(1) A Bank must prepare the prudential returns that it is required to prepare by a notice published by the AFSA on its own website. Such a notice may also require Banks to give other information to the AFSA.

(2) The Bank must give the return to the AFSA within the period stated in the notice.

(3) The AFSA may, by written notice:

• (a) require a Bank to prepare additional prudential returns;
• (b) exempt a Bank from a requirement to prepare annual, biannual, quarterly or monthly returns

(or a particular return); or

• (c) extend the period within which to give a return.

(4) An exemption may be subject to one or more conditions. The Bank availing the exemption must comply with any condition attached to an exemption.

(5) The Bank must prepare and submit its prudential returns in accordance with the AFSA’s instructions. Such instructions may require that the return be prepared or given through an electronic submission system.

(6) The instructions may be set out in these rules, in the return itself, in a separate document published by the AFSA on its own approved website or by written notice. These instructions, wherever or however they are given, are collectively referred to as instructions for preparing returns.

Note:Instructions may be in the form of formulae or blank spaces that a Bank is expected to use or fill in which would automatically compute the amounts to be reported.

3.5. Giving information

(1) The AFSA may, by written notice, require a Bank to provide information in addition to that required under these rules.

(2) A Bank must submit the required information to the AFSA in accordance with the AFSA’s instructions and within the period stated in the written notice seeking such information. The AFSA may extend the period for the submission of such information.

(3) The AFSA may exempt a Bank from giving information. The Bank must comply with any conditions attached to such an exemption.

3.6. Accounting standards

A Bank must prepare and maintain its financial accounts and prepare its financial statements in accordance with the International Financial Reporting Standards (IFRS).

3.7. Signing returns

(1) A prudential return must be signed by 2 individuals, who are Approved Individuals for the Bank and who occupy any of the Controlled Functions of Director, Senior Executive Officer or Finance Officer. The AFSA, by way of a notice, may prescribe acceptable modes of affixing a signature for the prudential returns, including but not limited to electronic signatures.

(2) If these Approved Individuals are not available or are unable to sign, the prudential return must be signed by both of the individuals approved to exercise the following Controlled Functions:

• (a) the Risk Manager function;
• (b) the Compliance Officer function.

3.8. Obligation to notify the AFSA

(1) A Bank must notify the AFSA if it becomes aware, or has reasonable grounds to believe, that the Bank has breached, or is about to breach, a prudential requirement.

(2) In particular, the Bank must notify the AFSA as soon as practicable of:

• (a) any breach or potential breach of its minimum capital requirement;
• (b) any concern it has about its solvency or capital adequacy position;
• (c) any indication of significant adverse change in the market price of, or trading volume of, the equity capital or other capital instruments of the Bank or those of its Financial Group (including pressure on the Bank to purchase its own equity or debt);
• (d) any other significant adverse change in its capital; and
• (e) any significant departure from its Internal Capital Adequacy Assessment Process (ICAAP).

(3) The Bank must also notify the AFSA of any measures planned or taken to deal with any real or potential breach or concerns related to its solvency or capital adequacy position.