The cash needs requirement obliges the licensee to have sufficient cash resources to meet its liabilities over the next three months. It is met by one of five options: Option 1, a reasonable estimate of cash flows over a period of at least three months ahead based on the licensee's reasonable assumptions, with a cash buffer or an eligible undertaking covering the shortfall (and documentation of the assumptions, contingencies and the cash buffer, except where a twenty per cent buffer makes documentation of contingencies unnecessary); Option 2, the same projection but with access to cash resources, eligible undertakings or other liquidity sufficient to meet projected liabilities; Option 3, an eligible undertaking from an eligible provider covering projected liabilities; Option 4, the licensee is owned by an Australian ADI or by another prudentially regulated body that has given an eligible undertaking; and Option 5, an eligible undertaking from a body regulated by APRA or overseas equivalent for the full amount. Under Options 1 and 2 the projection must be updated whenever there is reason to suspect it is no longer reasonable, the governing body must approve it at least quarterly, and the licensee must document the calculations, the assumptions and the basis for them. Licensees must monitor their financial position against the projection as part of risk management.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.