Document ID: chunk:federal_register_of_legislation:F2024C01248:reg:2:p4
Version: federal_register_of_legislation:F2024C01248
Segment Type: reg
Provision Reference: reg 2 (pt 4/10)
Character Range: 193442–196071

adequacy conditions if they have the effect that the issuer of the note is obliged or able to defer the payment of the principal or interest beyond the date on which it would otherwise be payable if, on that date:
 (a) the issuer of the note is insolvent, or would become insolvent if the payment were made; or
 (b) if the issuer of the note is an entity that is regulated by APRA or a comparable foreign regulator—the issuer is in breach of its capital adequacy ratio or would be in breach if the payment were made.

Obligations to pay before 15 April 2010
 (5) If the obligation is an obligation to pay at a time before 15 April 2010, this section applies only to the extent that applying it would not have the result that:
 (a) the rights of a person (other than the Commonwealth or an authority of the Commonwealth) immediately before 15 April 2010 would be affected so as to disadvantage the person; or
 (b) liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth), for anything done or omitted to be done before 15 April 2010.

974‑135.04  Perpetual cumulative subordinated note with profitability, insolvency or negative earnings conditions
 (1) This section applies to an obligation to pay interest on a relevant perpetual subordinated note at a particular time on or after 1 July 2001.
 (2) For the purposes of paragraphs 974‑135(8)(a) and (b) of the Act, the fact that the obligation is subject to profitability, insolvency or negative earnings conditions does not in itself prevent the obligation from being a non‑contingent obligation.

Meaning of relevant perpetual subordinated note
 (3) A relevant perpetual subordinated note is a perpetual subordinated note that:
 (a) at the time of the note's issue:
 (i) does not constitute or meet the requirements of a Tier 1 capital instrument; and
 (ii) does not form part of the Tier 1 capital of the issuer of the note, or a connected entity, and the reason for the note not doing so is not that the instrument is in excess of the Tier 1 capital required for the purposes of prudential standards that deal with capital adequacy; and
 (b) would be a debt interest but for the obligation being subject to one or more profitability, insolvency or negative earnings conditions; and
 (c) is subject to the condition that any deferred interest must accumulate (with or without compounding); and
 (d) was issued by:
 (i) an ADI that is a bank or non‑mutual building society and that is regulated for prudential purposes by APRA; or
 (ii) a subsidiary of an ADI mentioned in subparagraph (i), being a subsidiary that is regulated