Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p55
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 142694–145538

Capital of the ADI, at Level 1 and Level 2, as applicable.
15.         Issue documentation may provide for a ranking of conversion under which instruments may be converted or written-off upon a non-viability event, provided that the terms of the issue documentation do not impede the ability of the instrument to be immediately converted or written off. Any ranking must provide for all Additional Tier 1 Capital instruments to be fully converted or written-off before any Tier 2 Capital instruments are required to be converted or written-off. Any conversion or write-off of Tier 2 Capital instruments will only be necessary to the extent that conversion or write-off of Additional Tier 1 Capital instruments is insufficient to permit a declaration that a non-viability event no longer applies.
16.         Where an Additional Tier 1 Capital or Tier 2 Capital instrument provides for conversion into ordinary shares or mutual equity interests when a non-viability event occurs, the conversion provisions in issue documentation must satisfy in the case of Additional Tier 1 Capital instruments the requirements of paragraphs 29 and 30 of Attachment E to this Prudential Standard, and, in the case of a Tier 2 Capital instruments, the requirements in paragraphs 28 and 29 of Attachment G to this Prudential Standard.
17.         Where an Additional Tier 1 Capital or Tier 2 Capital instrument provides for a write-off of the instrument, upon a non-viability event, the write-off provisions in the issue documentation must satisfy the requirements in paragraph 33 of Attachment E to this Prudential Standard for an Additional Tier 1 Capital instrument, and the write-off provisions must satisfy paragraph 32 of Attachment G to this Prudential Standard for a Tier 2 Capital instrument.
18.         The contractual terms of an Additional Tier 1 Capital or Tier 2 Capital instrument must provide that, on conversion or write-off of the instrument upon a non-viability event, any residual claims associated with the portion of the instrument converted or written off, are not senior to claims associated with ordinary shares or mutual equity interests of the ADI, and not senior to claims associated with ordinary shares of the parent entity.
19.         An ADI must notify APRA, if the ADI anticipates that:
(a)          the ADI may be exposed to the occurrence of a non-viability event;
(b)          a fully consolidated subsidiary in the Level 2 group may be exposed to the occurrence of a non-viability event contained in non-viability requirements imposed on it by a host regulator or by statute; or
(c)          the ADI may be subject to a non-viability event contained in non-viability requirements imposed by a home regulator or statue upon the ADI's foreign bank parent; or
(d)          a non-viability event may occur in relation to a fully