Document ID: chunk:federal_register_of_legislation:F2020L01591:body:0:p12
Version: federal_register_of_legislation:F2020L01591
Segment Type: other
Provision Reference: 
Character Range: 29267–32135

the occurrence of events which would materially and negatively impact the soundness of the ADI; and
(c)          the ADI underwrites a significant proportion of the issue of securities and either of the following conditions exist:
(i)            the ADI cannot demonstrate its ability in placing securities of the type underwritten; or
(ii)         the amount of the ADI's aggregate commitment under all underwriting facilities as sole dealer is more than 20 per cent of the ADI's Tier 1 Capital.
9.             An ADI that underwrites the issue of securities by a funds management vehicle must not hold more than 20 per cent of the outstanding value of a funds management vehicle's securities after two months of the underwriting agreement's commencement. Additionally, from two months after the underwriting agreement's commencement, any exposure over this amount must be deducted from Common Equity Tier 1 Capital.

Attachment C — Extended Licensed Entity
     1. An ADI must obtain approval from APRA to treat one or more of its subsidiaries as consolidated with the ADI itself, to form an ELE for prudential and reporting purposes.[10]
2.             An ELE subsidiary that no longer meets the criteria in paragraph 3 of this Attachment will cease to form part of the ELE and must be treated as a non-ELE related entity of the ADI. An ADI must inform APRA as soon as it becomes aware that an ELE subsidiary is likely to or no longer satisfies the criteria set out in this Attachment.
3.             In order for a subsidiary to be eligible to be consolidated with the ADI itself to form an ELE:
(a)          the subsidiary must:
(i)            be incorporated in Australia unless the subsidiary has been established to borrow on behalf of the ADI and continues to restrict its activities to solely borrowing on behalf of the ADI;
(ii)         be wholly owned by the ADI, and the Board of the subsidiary must be composed entirely of members of the ADI's Board or senior management;
(iii)       not be an entity regulated directly by APRA or by an equivalent regulator overseas;
(iv)        not undertake any business that the ADI is prevented from conducting under the Banking Act;
(v)          not be structured, or undertake business, for the purpose of circumventing APRA's prudential or reporting requirements; and
(vi)        not undertake borrowings from, or establish liabilities (either on- or off-balance sheet) to, entities other than the ADI, except where the subsidiary has been established to borrow on behalf of the ADI, and all funds are on-lent directly to the ADI. Taxation liabilities, employee entitlements, administration and operating expenses of the subsidiary are excluded from this requirement; and
(b)          the ADI must:
(i)            have complete information on the individual assets, liabilities and off-balance sheet positions of