Regulatory AlertsPrudential Standard SPS 114 Operational Risk Financial Requirement
The Australian Prudential Regulation Authority issued Prudential Standard SPS 114 to require all registrable superannuation entity licensees to maintain adequate financial resources to protect beneficiaries from operational risk losses. The standard mandates that licensees establish a documented strategy, determine prudent target amounts and tolerance limits, and strictly define the permissible uses of these reserves. Compliance obligations include implementing replenishment plans for shortfalls, conducting annual reviews, and notifying the regulator of material changes to the financial requirements.
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