Document ID: chunk:federal_register_of_legislation:F2024L00884:body:0:p13
Version: federal_register_of_legislation:F2024L00884
Segment Type: other
Provision Reference: 
Character Range: 31654–34474

company must ensure that, at all times, the capital base of the general fund exceeds the PCR of the fund.
57.         A friendly society must ensure that, at all times, 120 per cent of the net assets of the general fund exceeds the PCR of the fund.[11]

Attachment A - Criteria for classification as paid-up ordinary shares
     1. To be classified as paid-up ordinary shares in Common Equity Tier 1 Capital, an instrument must satisfy the following criteria:
(a)          the instrument must be the only class of ordinary shares, except for the distinction between voting and non-voting ordinary shares. Non-voting ordinary shares must be identical to voting ordinary shares of the issuer in all respects except the absence of voting rights;
(b)          the instrument represents the most subordinated claim in liquidation of the issuer;
(c)          the instrument holder is entitled to a claim on the residual assets that is proportional to its share of issued capital, after all senior claims have been repaid in liquidation (i.e. there is an unlimited and variable claim, not a fixed or capped claim);
(d)          the principal amount of the instrument is perpetual (i.e. it has no maturity date) and is never repaid outside of liquidation (other than discretionary repurchases subject to APRA approval);
(e)          distributions on the instrument are paid out of distributable items (retained earnings included) of the issuer, and there are no features that require the issuer to make payments in kind. The level of distributions must not be tied or linked to the amount paid up at issuance, or to the credit standing of the issuer, and must not be subject to a contractual cap, except to the extent that restrictions applied to the payment of distributions are in accordance with Prudential Standard LPS 110 Capital Adequacy (LPS 110);
(f)           there are no circumstances under which the distributions are obligatory. Non-payment of a distribution does not trigger any restrictions on the issuer or any other member of the group to which the issuer belongs. Any waived distributions are non-cumulative (i.e. they are not required to be made up by the issuer at a later date). Non-payment of distributions must not be an event of default of the issuer or of any other member of the group to which the issuer belongs;
(g)          distributions are paid only after all legal and contractual obligations have been met and payments on more senior capital instruments have been made. There are no preferential distributions, including in respect of other elements classified as Common Equity Tier 1 Capital;
(h)          the instruments take the first and proportionately greatest share of any losses as they occur.[12] Within Common Equity Tier 1 Capital, each instrument absorbs losses proportionately, and