Document ID: chunk:federal_register_of_legislation:F2024L00884:body:0:p6
Version: federal_register_of_legislation:F2024L00884
Segment Type: other
Provision Reference: 
Character Range: 13324–16094

in this Prudential Standard.
22.         A life company must not include a capital instrument that involves the use of a special purpose vehicle (SPV), or a stapled security structure consisting of the issue of a preference share and a stapled instrument of another form, in its regulatory capital.
23.         A life company must not include a capital instrument in its capital base if the capital instrument has features that hinder recapitalisation of the life company, or a related entity of the life company. This includes features that require the life company or a related entity of the life company, to compensate investors if a new instrument is issued at a lower price during a specified timeframe.
24.         A capital instrument is not eligible for inclusion in the capital base if it contains any terms that could inhibit the life company's ability to be managed in a sound and prudent manner, particularly in times of financial difficulty, or restrict APRA's ability in its role as a prudential regulator to resolve any problems encountered by the life company.
25.         A capital instrument is not eligible for inclusion in the capital base if it includes any 'repackaging' arrangements that have the effect of compromising the level of capital raised.[7]
26.         A life company or a related entity of the life company, must not create an expectation at issuance that a capital instrument will be bought back, redeemed or cancelled prior to maturity, and the statutory or contractual terms of the instrument must not include any feature that may give rise to such an expectation prior to maturity. A life company or a related entity of the life company, must not assume, or create market expectations, that supervisory approval will be forthcoming for the life company or a related entity of the life company, to buy back, redeem or cancel an instrument prior to maturity.
27.         A life company may not, without obtaining APRA's prior written approval, enter into an arrangement where it may purchase, or provide financial assistance with a dominant purpose of facilitating the purchase by another party of, its own capital instruments. Any such arrangement, if approved by APRA, shall be subject to a limit agreed with APRA.
28.         A life company must provide APRA, as soon as practicable, with copies of documentation associated with the issue of Additional Tier 1 Capital and Tier 2 Capital instruments.
29.         Where the terms of a capital instrument depart from established precedent, a life company must consult with APRA on the eligibility of the instrument for inclusion in a category of the life company's capital base in advance of the issuance of the instrument, and provide APRA with all information it requires to assess