Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p3
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 5552–8549

or Australian Auditing and Assurance Standard is a reference to the instrument as in force from time to time.

Definitions
10.         The following definitions are used in this Prudential Standard:
(a)          capital instruments – includes all capital instruments eligible to be included in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital;
(b)          distributable items – means items which are permitted to be distributed in accordance with relevant statutory and regulatory requirements applicable to distributions by the issuer;
(c)          loss absorption event – has the meaning in paragraph 2 of Attachment F to this Prudential Standard;
(d)          mutual equity interests – capital instruments issued by mutually-owned ADIs that meet the criteria in Attachment I to this Prudential Standard;
(e)          mutually-owned ADI – means an ADI that is a 'mutual entity' as defined in the Corporations Act;
(f)           non-viability event – has the meaning in paragraph 2 of Attachment H to this Prudential Standard;
(g)          paid-up instrument – means a capital instrument where:
(i)            the payment of the capital has been received with finality by the issuer;
(ii)         the capital is reliably valued;
(iii)       the capital is fully under the issuer's control; and
(iv)        the instrument does not, directly or indirectly, expose the issuer to the credit risk of an investor;
(h)          related entity – means an entity over which an ADI or parent entity of the ADI exercises control or significant influence and can include a parent company, a sister company, a subsidiary or any other affiliate;
(i)            TLAC instrument – means an instrument that would be eligible for recognition under the Total Loss Absorbing Capacity standard set out in Principles on Loss-absorbing and Recapitalisation Capacity of G-SIBs in Resolution issued by the Financial Stability Board on 9 November 2015.

Regulatory Capital
11.         For the purposes of this Prudential Standard:
(a)          a component of capital is any form of capital specified in this Prudential Standard as eligible for inclusion in Regulatory Capital; and
(b)          a category of capital is a group of components of capital.
12.         Regulatory Capital consists of the following categories:
(a)          Tier 1 Capital (going-concern capital[2]), which comprises:
(i)            Common Equity Tier 1 Capital;
(ii)         Additional Tier 1 Capital; and
(iii)       paid-up mutual equity interests issued by a mutually-owned ADI that meet the criteria in paragraph 1 of Attachment I to this Prudential Standard and are above the limit specified in paragraph 4 of Attachment I; and
(b)          Tier 2 Capital (gone-concern capital[3]);
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