Understanding APRA CPS 234 Requirements

Understanding APRA CPS 234 Requirements

APRA CPS 234 sets out information security requirements for APRA-regulated entities. This guide helps you understand and implement these requirements.

What is CPS 234?

CPS 234 is a prudential standard that requires APRA-regulated entities to:

Key Requirements

1. Clearly Defined Information Security-Related Roles

**Requirements**: - Board maintains ultimate responsibility - Senior management accountability - Clear roles and responsibilities - Three lines of defense model

**Implementation**: - Document governance structure - Define reporting lines - Assign specific responsibilities - Regular effectiveness reviews

2. Information Security Capability

**Requirements**: - Maintain appropriate resources and expertise - Keep pace with changing security landscape - Have access to specialist skills - Continuous improvement

**Implementation**: - Hire qualified security personnel - Provide ongoing training - Engage external experts when needed - Regular capability assessments

3. Implementation of Controls

**Requirements**: - Systematic framework of controls - Based on risk assessment - Address information asset security - Regular testing and maintenance

**Implementation**: - Adopt recognized frameworks (NIST, CIS) - Risk-based approach - Document control objectives - Continuous monitoring

4. Third-Party Arrangements

**Requirements**: - Due diligence before engagement - Contractual security requirements - Ongoing monitoring and oversight - Right to audit provisions

**Implementation**: - Vendor security assessments - Security clauses in contracts - Regular vendor reviews - Incident notification requirements

5. Information Security Incident Management

**Requirements**: - Detection and response capability - Escalation procedures - Notify APRA within 72 hours of material incidents - Post-incident review

**Implementation**: - Incident response plan - 24/7 monitoring - Clear escalation paths - Lessons learned process

6. Internal Audit

**Requirements**: - Regular independent review - Test control effectiveness - Report to board and senior management - Audit trail maintenance

**Implementation**: - Annual audit schedule - Qualified internal auditors - Comprehensive testing - Follow-up on findings

Information Asset Classification

Classify assets based on criticality:

Asset Categories

Protection Requirements

Risk Assessment Methodology

Step 1: Identify Threats

Common threats include: - Cyberattacks - Insider threats - System failures - Natural disasters - Third-party breaches

Step 2: Assess Vulnerabilities

Evaluate weaknesses in: - Technical controls - Physical security - Personnel - Processes - Third parties

Step 3: Determine Impact

Consider: - Financial loss - Regulatory penalties - Reputation damage - Operational disruption - Customer impact

Step 4: Evaluate Likelihood

Assess probability based on: - Threat intelligence - Historical incidents - Control effectiveness - Industry trends

Step 5: Calculate Risk

Risk = Likelihood × Impact

Step 6: Treatment Options

Control Framework

Preventive Controls

Detective Controls

Corrective Controls

Incident Notification to APRA

Material Incidents

An incident is material if it: - Compromises confidentiality, integrity, or availability - Impacts large number of people - Has potential for significant harm - Affects critical operations

Notification Timeline

Notification Content

Include: - Incident description - Impact assessment - Response actions taken - Root cause analysis - Remediation plan

Board Reporting

Regular Reports Should Include

Frequency

Documentation Requirements

Maintain comprehensive documentation:

Policy Documents

Operational Documents

Evidence

Implementation Roadmap

Phase 1: Assessment (Months 1-2)

Phase 2: Foundation (Months 3-6)

Phase 3: Implementation (Months 7-12)

Phase 4: Optimization (Ongoing)

Common Challenges

Challenge 1: Resource Constraints

**Solution**: Prioritize based on risk, leverage managed services

Challenge 2: Legacy Systems

**Solution**: Compensating controls, phased upgrades

Challenge 3: Third-Party Risks

**Solution**: Comprehensive vendor management program

Challenge 4: Board Engagement

**Solution**: Business-focused reporting, risk-based approach

Conclusion

CPS 234 compliance requires a comprehensive, risk-based approach to information security. Success depends on strong governance, appropriate resources, and continuous improvement.

Need help with CPS 234 compliance? Our team specializes in financial services security.