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Term Definition Legal instruments

prudential context


means, in relation to activities carried on by a firm, the context in which the activities have, or might reasonably be regarded as likely to have, a negative effect on:

(1) the safety and soundness of firms; or

(2) the ability of the firm to meet either:

(a) the "fit and proper" test in threshold conditions 4E and 5E (Suitability); or

(b) the applicable requirements and standards under the regulatory system relating to the firm’s financial resources.