Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p4
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 8320–11144

that satisfy the criteria set out in this Prudential Standard.
13.         Total Capital is the sum of the components of Tier 1 Capital and Tier 2 Capital.
14.         An ADI must ensure that any component of capital that the ADI includes in a particular category of Regulatory Capital satisfies, in both form and substance, all requirements in this Prudential Standard for the particular category of Regulatory Capital in which it is included.
15.         An ADI must not include an item of capital in a particular category of Regulatory Capital if that item, when considered in conjunction with other related transactions that affect its overall economic substance, could be reasonably considered not to satisfy the requirements of this Prudential Standard for that category of Regulatory Capital.
16.         An ADI must ensure that the category of Regulatory Capital in which a component of capital is included, when measured at Level 1 or equivalent, is not upgraded to a higher category of Regulatory Capital when measured in an ADI's Regulatory Capital at Level 2. Any such component of capital must be reclassified to the appropriate lower category of Regulatory Capital when measured at Level 2.
17.         An ADI must not include a capital instrument in a category of Regulatory Capital based on a future event[4], until such time as:
(a)          the future event occurs; and
(b)          the proceeds have been irrevocably received by the ADI.
18.         APRA may require an ADI to:
(a)          exclude from its Regulatory Capital any item included as a component of capital that in APRA's opinion is not a genuine contribution to the financial strength of the ADI; or
(b)          reallocate to a lower category of Regulatory Capital any component of capital that in APRA's opinion does not satisfy the requirements of this Prudential Standard for the category of Regulatory Capital to which it was originally allocated.
19.         A capital instrument is not eligible for inclusion in a category of Regulatory Capital if the nature or complexity of its terms, its location of issue, or its structure raises concerns over whether the instrument fully, and unequivocally, satisfies the requirements for the category of Regulatory Capital in this Prudential Standard.
20.         An ADI must not include a capital instrument that involves the use of a special purpose vehicle (SPV), or a stapled security structure consisting of the issue of a preference share and a stapled instrument of another form, in its Regulatory Capital.
21.         An ADI must not include a capital instrument in its Regulatory Capital if the capital instrument has features that hinder recapitalisation of the ADI, or any other members of the group to which the ADI belongs. This includes features that require the ADI or any other