Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p41
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 103583–106458

issue documentation must satisfy the requirements in paragraph 32 of Attachment C to this Prudential Standard for an Additional Tier 1 Capital instrument, and the write-off provisions must satisfy paragraph 32 of Attachment D to this Prudential Standard for a Tier 2 Capital instrument.
32. The contractual terms of an Additional Tier 1 Capital or Tier 2 Capital instrument must provide that, on conversion or write-off of the instrument upon a non-viability event, any residual claims associated with the portion of the instrument converted or written off, are not senior to claims associated with ordinary shares or mutual equity interests of the regulated institution and not senior to claims associated with ordinary shares or mutual equity interests of the parent.
33. A regulated institution must notify APRA, if the regulated institution anticipates that:
     1. the regulated institution may be exposed to the occurrence of a non-viability event;
     2. a fully consolidated subsidiary in the Level 2 insurance group may be exposed to the occurrence of a non-viability event contained in non-viability requirements imposed on it by a host regulator or by statute;
     3. the regulated institution may be subject to a non-viability event contained in non-viability requirements imposed by a home regulator or statute upon the regulated institution's foreign parent; or
     4. a non-viability event may occur in relation to a fully consolidated subsidiary in the regulated institution's Level 2 insurance group or in relation to the regulated institution's foreign parent.

Attachment F – Level 2 insurance groups
This Attachment applies adjustments to the prudential requirements outlined in this Prudential Standard including Attachments A, B, C, D, and E for Level 2 insurance groups. A Level 2 insurance group must comply with all the prudential requirements in this Prudential Standard, unless a contrary prudential requirement is set out in this Attachment.

Capital base
The parent entity of a Level 2 insurance group must ensure that the category of capital in which a component of capital is included, when measured at an individual group member level, is not upgraded to a higher category of capital when measured in the Level 2 insurance group's capital base. Any such component of capital must be reclassified to the appropriate lower category of capital when measured for the Level 2 insurance group.

Capital issued by fully consolidated subsidiaries and held by third parties

Common Equity Tier 1 Capital
In addition to paragraph 31 of this Prudential Standard, Common Equity Tier 1 Capital of a Level 2 insurance group may include a portion of the minority interest (calculated in accordance with paragraphs 4 through to 8 of this Attachment) arising from the issue of ordinary shares to third parties by a fully consolidated subsidiary included in