Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p38
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 95825–98697

must be capable of conversion or write-off taking place at any time of day:
12. during a business day; or
13. on a day that is not a business day.
14. To qualify as Additional Tier 1 Capital or Tier 2 Capital, an instrument issued by a fully consolidated subsidiary included in the Level 2 insurance group must satisfy the requirements in this Attachment. As a result, a non-viability event applicable to a parent regulated institution must function as a non-viability event for the subsidiary itself for the instrument if the instrument is to be eligible for inclusion in the capital of the Level 2 insurance group. A fully consolidated subsidiary incorporated overseas may, however, also be subject to non-viability requirements imposed by a host or home regulator or under statute provided that the requirements are disclosed by the regulator, and issue documentation for the instrument discloses that the instrument is subject to a potential loss as a result of the requirements. The implementation of such non-viability requirements upon the overseas subsidiary must not be a non-viability event for instruments issued by the parent regulated institution under paragraph 1 of this Attachment.
15. To qualify as eligible Additional Tier 1 or Tier 2 Capital, an instrument issued by a locally-incorporated regulated institution that is a subsidiary of a foreign regulated institution must satisfy the requirements in this Attachment. A non-viability event of the regulated institution, however, need not trigger any loss absorption requirement upon the foreign parent.
16. A locally-incorporated regulated institution that is a subsidiary of a foreign entity may, either individually or as part of a group, also be subject to non-viability requirements applied by the authorities in the overseas country of incorporation of the foreign parent, provided that the requirements are disclosed by the authorities, and issue documentation for the instrument discloses that the instrument is subject to potential loss as a result of the requirements. A locally-incorporated regulated institution that is a subsidiary of a foreign parent, is permitted to, but not required to, provide for the application of a non-viability event based on non-viability requirements [44] applied to the foreign parent. As a result, a non-viability requirement applicable to the foreign parent may function as a non-viability event for the regulated institution itself in relation to Additional Tier 1 Capital or Tier 2 Capital instruments issued by the regulated institution.
17. Where a non-viability event occurs in accordance with this Attachment, the amount of conversion or write off of Additional Tier 1 or Tier 2 Capital instruments is to be determined in accordance with paragraphs 11 and 12 of this Attachment. If a non-viability event occurs as a result of only host or home regulator