Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p10
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 23338–26138

by the regulated institution that meet:
 4. the criteria for inclusion in Tier 2 Capital set out in Attachment D to this Prudential Standard; and
 5. the requirements for loss absorption at the point of non-viability set out in Attachment E to this Prudential Standard; and
 6. regulatory adjustments applied in the calculation of Tier 2 Capital as required under Attachment B.

Additional Tier 1 or Tier 2 Capital issued overseas by the regulated institution
 1. Additional Tier 1 Capital instruments and Tier 2 Capital instruments may be issued by a regulated institution either in its country of incorporation or through a branch in another country, provided the instrument:
 2. constitutes an obligation of the regulated institution at all times;
 3. is freely available to absorb losses across all of the operations of the regulated institution; and
 4. meets all of the requirements of this Prudential Standard for inclusion in Additional Tier 1 Capital or Tier 2 Capital.
 5. In addition to paragraph 42 of this Prudential Standard, the Level 2 capital base can include Additional Tier 1 Capital instruments and Tier 2 Capital instruments issued by the parent entity of the Level 2 insurance group, or a fully consolidated subsidiary of the group, either in its country of incorporation or through a branch in another country, provided the instrument:
 6. represents an obligation of the parent entity or the consolidated subsidiary itself at all times;
 7. is freely available to absorb losses across all of the operations of the Level 2 insurance group or the consolidated subsidiary that issued the instrument; and
 8. meets all of the requirements of this Prudential Standard for inclusion in Additional Tier 1 Capital or Tier 2 Capital.

Intra-group capital transactions
 1. The matters APRA may consider in assessing whether an item included by a regulated institution as a component of capital resulting from intra-group transactions is not a genuine contribution to financial strength include, but are not limited to, whether the item:
 2. is clearly supplied from debt raised by other group members;
 3. results from intra-group transactions with no economic substance;
 4. is contributed by a member of the group using funding sources, directly or indirectly, from the regulated institution itself; and
 5. is contributed by a group member and the funding of which contains cross-default clauses that would be triggered as a result of the regulated institution failing to meet any servicing obligations.
 6. In assessing the overall strength of Level 1 and Level 2 capital adequacy, APRA will have regard to the level of capital adequacy of individual group members of a group to which the regulated institution belongs, including any limitations in the amount of capital that may be