Regulatory Alerts2014-07-25
G6/2014: Application Process for Approval to Adopt the Standardised or Alternative Standardised Approach for Measuring Banks' Operational Risk Exposure
The South African Reserve Bank’s Registrar of Banks mandates that all banks, foreign branches, and controlling companies submit a formal application to obtain prior written approval before adopting the Standardised Approach (TSA) or Alternative Standardised Approach (ASA) for operational risk capital measurement. Applicants must provide a comprehensive documentation pack detailing governance structures, IT architecture, internal audit involvement, and self-assessment results against regulatory standards, while notifying the regulator at least six months in advance. The regulatory review process may take up to twelve months and can require parallel run reporting, and the guidance explicitly prohibits banks from reverting to simpler risk measurement frameworks once a more sophisticated approach has been approved.