Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697630284115.pdf (Antigua and Barbuda)
The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 8 2012, No.

28 ANTIGUA AND BARBUDA 5.

Fixed assets revaluation reserves (1) Fixed assets must be valued on a basis satisfactory to the Central Bank.

(2) Revaluation of premises shall only be carried out by independent and certified valuers.

(3) A financial institution must fully disclose and report in its balance sheet or notes to the audited accounts details of the reserves arising from revaluation of fixed assets.
(4) A financial institution must disclose the basis used to revalue its assets and the effective date of revaluation.

(5) Revaluation reserves on fixed assets may be included in Tier II Capital in accordance with the Schedule.

6.
6.

Subordinated Debt (1) Approved subordinated debt may be included in Tier II capital if it satisfies the following requirements: (a) it is unsecured; (b) it has an original fixed term to maturity of over five years; (c) it may be redeemed before maturity only at the option of the licensed financial institution and with the proper approval of the Minister in consultation with the Central Bank; and (d) it satisfies such further conditions prescribed by the Central Bank.
(2) In addition to the requirements of sub-regulation (1), approved subordinated debt may be included in Tier II capital during the last five years before maturity if a cumulative discount or amortisation factor of 20 percent per annum is applied to reflect the diminishing value of the subordinated debt as a continuing source of strength.

PART III CAPITAL ADEQUACY RATIO 7.

Capital adequacy Ratio THE BANKING (CAPITAL ADEQUACY AND CAPITAL RATIOS) REGULATIONS, 2012 2012, No.
28 [Published in the Official Gazette Vol.

XXXII No.

56 dated 18th October, 2012] ________ Printed at the Government Printing Office, Antigua and Barbuda, by Ralph George, Acting Government Printer — By Authority, 2012.

(1) A licensed financial institution shall assign all assets recorded on the balance sheet as well as 800—10.12 [Price $7.50] The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 2 2012, No.

28 2012, No.
28 2012, No.

28 7 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 PART II REQUIREMENTS FOR CERTAIN CAPITAL COMPONENTS 3.

Capital adequacy requirement.

(1) Every licensed financial institution shall maintain adequate capital in accordance with the following: (a) the provisions of section 13 of the Act; (b) the Schedule; (c) capital ratios as provided for under Regulation 7.
(2) (a) Every foreign licensed financial institution shall within one month of the end of its financial year, submit to the Central Bank an undertaking in writing in the form set out in the Letter of Comfort, that an amount: i. ii.
equivalent to its net assets, or which supplements the amount required to be equivalent to its net assets, which is not less than 5 per cent of its deposit liabilities or such other liabilities as may be determined by the Central Bank, has been attributed or pledged as assigned capital.

(b) The amount of assigned capital shall be specified in a schedule to the Letter of Comfort and shall be calculated on the financial institution’s deposit liabilities as at the financial year end.

4.
4.

Preference Shares Perpetual cumulative preference shares, long-term preference shares and mandatory convertible debt instruments must satisfy the following criteria to be eligible for inclusion in Tier II Capital: (a) they must be unsecured, subordinated and fully paid; (b) they must not be redeemable at the discretion of the holder; (c) they must be available to absorb losses; (d) service obligations attached to the instruments must be deferrable.
The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 6 2012, No.

28 2012, No.

28 3 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 that are potentially favourable.

THE BANKING (CAPITAL ADEQUACY AND CAPITAL RATIOS) REGULATIONS, 2012 “financial institution” refers to an institution licensed under section 5 of the Banking Act.
“financial liability” refers to a contractual obligation to: - deliver cash or another financial asset to another enterprise; - exchange financial instruments with another enterprise; under conditions that are potentially unfavourable.

ARRANGEMENT PART I PRELIMINARY Regulation 1.

2.

Short title Interpretation “fixed assets revaluation reserve” means the increase in book value of a fixed asset based on an independent and professional appraisal as to the market value of such an asset.
PART II REQUIREMENTS FOR CERTAIN CAPITAL COMPONENTS “Manual of Instructions” means the current Manual of ECCB Banking Schedules and Instructions.
“person” means an individual or legal person including an association or any group of persons acting in common, whether or not incorporated; “Schedule” refers to the Capital Adequacy Computation Schedule; “specific provision for loan losses” means loan loss reserves held against identified losses or potential losses and which can not be utilised to satisfy general losses which subsequently materialise.
“subordinated debt” means debt having a claim against the issuer’s assets that is lower ranking or junior to other obligations, and is paid after claims to holders of senior claims are satisfied.

“substantial equity investment” is one in which a licensed financial institution owns at least twenty per cent of an another entity’s equity.

3.

Capital adequacy Requirement 4.

5.

6.

Preference Shares Fixed assets revaluation reserves Subordinated Debt PART III CAPITAL ADEQUACY RATIO 7.
Capital Adequacy Ratio PART IV IMPAIRMENT OF CAPITAL ADEQUACY 8.

Declaration and payment of dividend and other transfers 9.

Sanctions PART V REPEAL “total regulatory capital” refers to capital which is approved for regulatory purposes and computed in accordance with the Schedule.

10.

Repeal “Tier I Capital” refers to unimpaired capital and reserves that is computed in accordance with relevant criteria established in the Schedule.
“Tier II Capital” refers to capital computed in accordance with relevant criteria established in the Schedule.

The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 4 2012, No.

28 2012, No.

28 5 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 ANTIGUA AND BARBUDA THE BANKING (CAPITAL ADEQUACY AND CAPITAL RATIOS) REGULATIONS, 2012 2012, No.
28 THE BANKING (CAPITAL ADEQUACY AND CAPITAL RATIOS) REGULATIONS, made by the Minister of Finance in exercise of the powers contained in section 34(1) of the Banking Act, 2005 No.

14 of 2005.

PART I PRELIMINARY 1.

Short title (1) These regulations may be cited as the Banking (Capital Adequacy and Capital Ratios) Regulations, 2005.

(2) These Regulations apply to all financial institutions licensed under the Banking Act.

2.
2.

Interpretation In these Regulations, unless the context otherwise requires, “Act” means the Banking Act, No.

14 of 2005.

“capital adequacy” refers to maintenance of the aggregate of the minimum paid up capital stipulated in section 13 of the Act, and adherence to the capital adequacy requirements prescribed in Part III of these Regulations.
“financial assets” means any asset that is” - cash - an equity instrument of another enterprise; - a contractual right to receive cash or another financial asset from another enterprise; - a contractual right to exchange financial instruments with another enterprise under conditions The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 16 2012, No.

28 2012, No.
28 2012, No.

28 9 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 off-balance sheet exposures to broad risk categories in accordance with the Schedule.

(2) A licensed financial institution shall maintain a minimum ratio between its total regulatory capital (the numerator) and the aggregate of its risk weighted on-balance sheet assets and risk weighted off-balance sheet assets less approved deductions, of not less than eight per cent, calculated on a consolidated and solo basis.
(3) A licensed financial institution shall calculate its capital adequacy ratio in accordance with the criteria prescribed in the Schedule.

(4) The Central Bank may require a licensed financial institution to increase its capital adequacy ratio above the amount specified in regulation 7(2).

(5) A licensed financial institution shall maintain adequate systems and procedures, satisfactory to the Central Bank, to facilitate computation of the capital adequacy ratio.
(6) In determining the adequacy of the systems and procedures, the Central Bank may have regard to international standards of best practice, the risk profile of a licensed financial institution and the resources of the licensed financial institution.

(7) A licensed financial institution shall provide the Central Bank with computations of its capital adequacy ratio in such form and frequency as the Central Bank may determine.
(8) (a) A licensed financial institution whose capital adequacy ratio falls below the minimum required amount shall employ one or a combination of the following strategies in order to achieve compliance within three months of the reduction in the capital adequacy ratio: (i) change the risk profile of its assets by converting high risk assets to lower risk assets; (ii) increase its total regulatory capital.

(iii) apply any other strategy approved by the Central Bank.
(b) Nothing in this regulation shall be interpreted to exempt a licensed financial institution from the requirements imposed by the Central Bank under section 15 (3) and 15 (4) of the Act.

PART IV IMPAIRMENT OF CAPITAL ADEQUACY 8.

Declaration and payment of dividend and other transfers The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 10 2012, No.

28 2012, No.
28 2012, No.

28 15 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 (1) A licensed financial institution shall not declare, credit or pay any dividend on its shares or make any other transfer from profits where such declaration, credit, payment or other transfer would impair its capital adequacy.
(2) Pursuant to Sub-regulation (1) a financial institution shall not take any of the actions specified therein unless and until: (i) (ii) all its capitalised expenses (including preliminary expenses, organisation expenses, share selling commission/brokerage, amount of losses incurred and any other item of expenditure not represented by tangible assets) have been completely written off; and all bad and doubtful debts and other classified assets have been fully and duly provided for, as required by guidelines issued by the Central Bank under section 36 of the Act.
(iii) the financial institution has complied with the requirements of section 14(1) of the Act.

(3) A licensed financial institution may declare credit or pay any dividend on its shares or make any other transfer from retained earnings, due to losses in the current year, upon certification from an external auditor of the adequacy of capital.

(4) A licensed financial institution shall not pay any dividend from unrealized gains including gains arising from asset revaluations.

9.
Sanctions (1) Where the Central Bank has reasonable cause to believe that a licensed financial institution is in breach of the capital adequacy requirement prescribed by regulation 3, the Central Bank may suspend access by the financial institution to credit facilities of the Central Bank or direct the financial institution to: (a) inject additional capital into the institution; (b) refrain from declaring and/or paying dividends; (c) suspend the acceptance of new deposits; (d) suspend the acquisition of fixed assets; (e) suspend lending operations; The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 14 2012, No.
28 2012, No.

28 11 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 (2) Where in the opinion of the Central Bank a licensed financial institution is in violation of the capital adequacy requirement, the Central Bank may take any of the measures prescribed in section 22 (1) of the Act.
(3) Where the Central Bank determines that a licensed financial institution’s capital deficiency is severe enough to have resulted in impairment of capital and such capital impairment is assessed to be detrimental to the interests of depositors, the Central Bank may recommend to the Minister that the licence be revoked under Section 22 (2) of the Act.

PART V REPEAL 10.

Repeal The Banking (Assigned Capital) Regulations, 1994 are hereby repealed.
The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 12 2012, No.

28 2012, No.

28 13 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 20 2012, No.

28 2012, No.
28 2012, No.

28 17 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 LETTER OF COMFORT We [Bank A] are the direct company of [Bank B] (hereinafter referred to as our Branch) which is incorporated in ……………………………………………………..and conduct banking business at ……………………………………….in……………………………………………….
We have set aside the amount specified in the Schedule to this letter, in respect of each of our Branch, which equivalent to or supplements the amount which is required to be kept as assigned capital by our Branch during the term of the Banking Business Licence, in accordance with section 13 of the Banking Act 2005 (No.

14 of 2005) of Antigua and Barbuda and the Banking (Capital Adequacy and Capital Ratios) Regulations, 200….(S.I.

No.

of 20…).
No.

of 20…).

We will maintain the amount specified in the Schedule to this letter in respect of each of our Branch in accordance with the law.

Regardless of this, we confirm to you that we accept ultimate responsibility for the maintenance of the required amount of assigned capital by our Branch in any further way should this ever be required.
It is understood that the amount specified in the Schedule to this Letter of Comfort will be reviewed at the end of each financial year in consultation with the Eastern Caribbean Central Bank in light of the balance sheet of our Branch.

We will confirm annually any revision of the amount specified in the Schedule to this Letter of Comfort.

This Letter of Comfort applies to each of our Branch and is valid during the terms of the respective Banking Business Licence.
Dated this………………………..day of ………………………………., 20……… Authorised Officer: ……………………………………………………...

Witness: ………………………………………………………………….

Address: ………………………………………………………………….

Occupation: ……………………………………………………………… Made this 2nd day of October, 2012.

Harold Lovell, Minister responsible for Finance.

The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 18 2012, No.

28 2012, No.
28 19 The Banking (Capital Adequacy and Capital Ratios) Regulations, 2012 APPENDIX I LIST OF CARICOM AND APPROVED FOREIGN COUNTRIES CARICOM COUNTRIES Antigua and Barbuda Anguilla Bahamas Barbados Belize Dominica Grenada Guyana Jamaica Montserrat St Lucia St Kitts and Nevis St Vincent and the Grenadines Suriname Trinidad and Tobago APPROVED FOREIGN COUNTRIES1 Australia Austria Belgium Canada Denmark Finland France Germany Greece Iceland Ireland Italy Japan Luxembourg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland United Kingdom United States ____________________________ 1 Approved foreign Governments and Central Bank are the Governments and Central Banks of these territories.