Document ID: chunk:federal_register_of_legislation:F2023L00682:body:0:p10
Version: federal_register_of_legislation:F2023L00682
Segment Type: other
Provision Reference: 
Character Range: 25404–28456

the regulated institution's own shares or capital instruments outside of any arrangement agreed upon with APRA in accordance with GPS 112; and

       (c)          the aggregate amount of dividend payments on ordinary shares that exceeds a regulated institution's after-tax earnings (as reported to APRA in the regulated institution's statutory accounts), after taking into account any payments on more senior capital instruments, in the financial year[7] to which they relate.

46.         A regulated institution proposing a capital reduction must provide APRA with a forecast showing the projected future capital position (including PCR) after the proposed capital reductions. The forecast should extend for at least two years.
47.         A regulated institution must satisfy APRA that its capital base will remain adequate for its future needs after a proposed reduction.

Reductions in capital for run-off insurers
48.         This paragraph applies to run-off insurers planning a reduction in capital. The insurer must submit to APRA:
       (a)          documents clearly setting out and evidencing its current financial position; and
       (b)          documents setting out the projected capital position with insurance liabilities valued in accordance with the methodology set out in GPS 340, except that the valuation must demonstrate that the tangible assets[8] of the insurer, after the proposed capital reduction, are sufficient to cover its insurance liabilities to a 99.5 per cent level of sufficiency, plus any other liabilities, as calculated by its Appointed Actuary.[9]

Category C insurers
49.         Any repatriation of assets in Australia, whether direct or indirect[10], by a Category C insurer that will result in a reduction in its net assets in Australia must be subject to APRA's prior consent consistent with the requirements of paragraphs 44 to 47.
50.         Paragraph 49 does not apply to any repatriation of assets in Australia out of the current year profits of a Category C insurer where the assets being repatriated to the head office of the Category C insurer or any other branch or related entity of the Category C insurer do not exceed the Category C insurer's after-tax earnings in the financial year[11] to which they relate (i.e. a repatriation of assets not wholly or partly funded from retained earnings).

Materiality
51.         A regulated institution must take into account materiality when calculating its capital base and prescribed capital amount. Particular values or components are considered material to the overall result of a calculation if misstating or omitting them would produce results likely to be misleading to the users of the information.

Notification requirements
52.         A regulated institution must inform APRA as soon as practicable of:
       (a)          any breach or prospective breach of its PCR;

       (b)          any significant departure from its ICAAP; or

       (c)          any significant adverse changes in the capital base or PCR.

    The notice must