(8)Prudential Standard CPS 226 generally applies to transactions in non-centrally cleared derivatives conducted between ‘APRA covered entities’ and ‘covered counterparties’. ‘APRA covered entities’ are authorised deposit-taking institutions (ADIs), including foreign ADIs, and non-operating holding companies authorised under the Banking Act, general insurers, including Category C insurers, non-operating holding companies authorised under the Insurance Act, and parent entities of Level 2 insurance groups, life companies including friendly societies and eligible foreign life insurance companies (EFLICs), and non-operating holding companies registered under the Life Insurance Act and registrable superannuation entity under the SIS Act in respect of their business operations. The definition of ‘covered counterparties’ broadly corresponds to the definition of ‘financial counterparty’ in Article 2(8) of Regulation (EU) No 648/2012 while excluding in a similar manner special purpose vehicles where the transaction is conducted for the sole purpose of hedging. The definition of ‘covered counterparties’ does not take into consideration the jurisdictional location of the counterparty as long as there is no doubt as to the enforceability of the netting agreement upon insolvency or bankruptcy of the counterparty or where collateral arrangements are not questionable and are legally enforceable upon default of the counterparty.