The Australian Prudential Regulation Authority (APRA) said that a new prudential standard came into force on Tuesday, requiring banks, insurers, and superannuation funds to be prepared to ensure the continuity of critical services and to respond to business disruptions, according to a same-day statement.

The new standard requires regulated entities to identify important business services and determine the extent to which these services can survive severe disruptions, as well as to test their business continuity planning to identify any vulnerabilities to ensure they are positioned to overcome severe disruptions.

The new rule also requires them to boost third-party risk management by ensuring risks from material service providers are identified and appropriately managed. The regulator will also require each regulated entity to provide a list of its most material service providers.

APRA said it worked closely with the industry to enable regulated entities to be ready to comply with the new standard. It granted smaller, less complex entities an additional 12 months to meet some requirements.