Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p5
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 10440–13215

include a capital instrument in a category of the capital base based on a future event[2], until such time as:
13. the future event occurs, and
14. the proceeds have been irrevocably received by the regulated institution.
15. APRA may require a regulated institution to:
16. exclude from its capital base any item included as a component of capital that in APRA's opinion is not a genuine contribution to the financial strength of the regulated institution; or
17. reallocate to a lower category of the capital base any component of capital that in APRA's opinion does not satisfy the requirements of this Prudential Standard for the category of the capital base to which it was originally allocated.
18. A capital instrument is not eligible for inclusion in a category of the capital base 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 the capital base in this Prudential Standard.
19. A regulated institution 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.
20. A regulated institution must not include a capital instrument in its capital base if the capital instrument has features that hinder recapitalisation of the regulated institution, or any other members of the group to which the regulated institution belongs. This includes features that require the regulated institution or any other members of the group, to compensate investors if a new instrument is issued at a lower price during a specified timeframe.
21. A capital instrument is not eligible for inclusion in the capital base if it contains any terms that could inhibit the regulated institution's ability to be managed in a sound and prudent manner, particularly in times of financial difficulty, or restrict APRA's ability in its role as a prudential regulator to resolve any problems encountered by the regulated institution.
22. A capital instrument is not eligible for inclusion in the capital base if it includes any 'repackaging' arrangements that have the effect of compromising the quality of capital raised.[3]
23. A regulated institution or any other member of the group to which the regulated institution belongs, must not create an expectation at issuance that a capital instrument will be bought back, redeemed or cancelled, and the statutory or contractual terms of the instrument must not include any feature that may give rise to such an expectation. A regulated institution or any other members of the group, must not assume, or create market