Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p18
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 44384–47327

the regulated institution is able to demonstrate unrestricted and unfettered access to a fund surplus in a timely manner. Subject to APRA approval, the regulated institution may include the surplus in its capital base. This surplus will no longer be required to be deducted from Common Equity Tier 1 Capital.
 2. A regulated institution must deduct any deficit in a defined benefit superannuation fund of which the regulated institution is an employer-sponsor and that is not already reflected in Common Equity Tier 1 Capital.

Reinsurance assets
 1. A regulated institution must deduct all reinsurance assets[16] reported in relation to each reinsurance arrangement that does not meet the reinsurance documentation test in Prudential Standard GPS 230 Reinsurance Management (GPS 230).
 2. A regulated institution must deduct all reinsurance assets reported in relation to each reinsurance contract entered into by the regulated institution incepting on or after 31 December 2008 that does not meet the governing law requirements in GPS 230.

Investments in subsidiaries, joint ventures and associates
 1. A regulated institution must make a deduction for investments in subsidiaries, joint ventures and associates that are subject to regulatory capital requirements. The amount of the deduction is the lesser of the regulated institution's share of the regulatory capital requirements[17] and the value of the investment that is recorded on the regulated institution's balance sheet after adjustment for any intangible component in accordance with paragraphs 15 and 17 of this Attachment. This deduction must be applied after any deduction for intangibles in the investment in accordance with paragraphs 15 and 17 of this Attachment.
 2. For the purposes of the deduction in paragraph 22 of this Attachment, the regulatory capital requirement of the investment is:
     1. the prescribed capital amount if the investment is in an insurer as defined under the Act; or
     2. the equivalent amount to the prescribed capital amount if the investment is an entity carrying on insurance business in a foreign jurisdiction; or
     3. a comparable regulatory capital requirement as agreed with APRA.[18]
Unless agreed otherwise with APRA, the regulatory capital requirement must be the amount determined at the reporting date or within a period of three months prior to the reporting date.
 1. If the investment subject to the deduction in paragraph 22 of this Attachment is a non-operating holding company (NOHC), the regulated institution must 'look-through' the investment to the value and regulatory capital requirements of the entity/entities owned by the NOHC.

Assets under a fixed or floating charge
 1. Subject to paragraph 26 of this Attachment, a regulated institution must deduct all assets of the regulated institution that are under a fixed or floating charge[19], mortgage or other security to the extent of the indebtedness secured