Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p34
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 88275–91332

interest payments, must be predetermined and set out in the issue documentation.
17.         The instrument must include provisions which comply with the loss absorption requirements at the point of non-viability as required by Attachment H to this Prudential Standard.
18.         The instrument must be clearly and separately disclosed in the issuer's financial statements and, at Level 2, in any consolidated financial statements.
19.         The instrument must not include the following clauses:
(a)          a cross-default clause linking the issuer's obligations under any debt instrument or other capital instrument to default by the issuer, or default by another party (related or otherwise), under the instrument itself; or
(b)          an event of default clause specifying an event relating to any debt instrument or other capital instrument of the issuer, that brings the issuer into default under the instrument itself.
       For purposes of paragraph 19(b), an event of default clause includes a clause specifying the following events:
(i)            the exercise or non-exercise of discretions within the debt instrument or other capital instrument;
(ii)         an adverse event or change, however so described or determined, occurring in respect of the debt instrument or other capital instrument; and
(iii)       any consequence arising from, or any action taken or intended to prevent[34], the above events or a default by the issuer under the debt instrument or other capital instrument,
       but does not include a clause specifying the irrevocable winding-up (that is, either by way of an effective resolution by shareholders or members for winding-up, or a court order has been made, and the time for the appeal of the decision has passed) of the issuer.
20.         The issue documentation must clearly and prominently state:
(a)          the instrument is perpetual;
(b)          the instrument is unsecured;
(c)          the subordinated nature of the instrument and that neither the issuer nor the holder of the instrument is allowed to exercise any contractual right of set-off;
(d)          the instrument is not subject to netting;
(e)          the issuer cannot buy back, repurchase or redeem the instrument other than in terms permitted under this Prudential Standard;
(f)           if relevant, the application of requirements for loss absorption required under Attachment F to this Prudential Standard;
(g)          the application of requirements for loss absorption at the point of non-viability under Attachment H to this Prudential Standard;
(h)          the instrument does not represent a deposit liability of an issuing ADI;
(i)            the instrument is neither covered by the Financial Claims Scheme nor guaranteed by the Australian Government; and
(j)            where the issuer has full discretion over the timing and amount of any distributions paid on the instrument, including not paying a distribution.
21.         For the purposes of paragraph 9 of this Attachment, failure to make a distribution or