Response to submissions – Centralised glossary for APRA’s prudential framework

On 27 November 2023, APRA released draft Prudential Standard CPS 001 Defined terms (CPS 001) for consultation. This letter shares industry feedback, and notes that the final version of the standard is now available.

About the standard

CPS 001 is a new cross-industry standard which consolidates five existing standards into one. It does not change existing definitions found in APRA standards. However, it does remove terms that are no longer used; address some duplication across standards; and adds definitions of ‘general provisions’ and ‘specific provisions’, which were previously only contained in letters to industry. The standard also explicitly links each defined term to the industries it applies to.

In tidying up and centralising definitions, CPS 001 aids the operation of APRA’s new digital Prudential Handbook. Released in June 2024, the Handbook is a ‘one stop shop’ for all APRA standards and guidance for regulated entities. The Handbook makes it easy for users to look up defined terms and find where they are used across the prudential framework. Together, CPS 001 and the digital Prudential Handbook should make it easier for users to understand and meet APRA’s expectations.

Submissions received

APRA received three submissions. Respondents were broadly supportive of merging existing standards. The submissions also noted further opportunities for improvement by aligning definitions across the prudential framework and/or with terms already defined in law, and where relevant, expanding the application of defined terms so that they apply consistently across industries.

Next steps

APRA recognises there is further scope to streamline definitions and improve consistency across the prudential framework. We will consider the feedback received on further improvements that could be made. The new standard, CPS 001, will act as a centralised glossary and will promote more consistent definitions going forward.

CPS 001 will come into effect from 1 October 2024.

Yours sincerely,

Clare Gibney
Executive Director
Policy & Advice