The new requirements will replace the existing Operational Risk Financial Requirement (ORFR) with a two-tiered model: The first part will ensure that RSE licensees have access to financial resources to fund recovery or exit activities. The second part will address operational risks and distribute the impact of such risks fairly across various member groups. This component will be similar to the current ORFR, but will allow more flexibility.

CA ANZ notes that the proposed changes will affect auditors, as the ORFR needs to be audited each year. The changes proposed in the discussion paper are very likely to affect existing audit procedures. This should be discussed with the audit profession prior to implementation.

Additionally, CA ANZ notes that there are a number of new variables which are to be combined into the new ORFR. These are likely to require extensive changes to existing reporting, risk, audit, and administration processes currently in use by trustees.