Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p7
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 15544–18347

charge against earnings; and
 5. rank behind the claims of policyholders and other creditors in the event of winding-up of the issuer.
 6. Common Equity Tier 1 Capital consists of the sum of:
 7. paid-up ordinary shares issued by a regulated institution (whether listed on exchange or unlisted) that meet the criteria in Attachment A to this Prudential Standard;
 8. paid-up mutual equity interests issued by a mutually-owned regulated institution that meet the criteria in paragraph 1 of Attachment G to this Prudential Standard up to the limit specified in paragraph 4 of Attachment G;
 9. retained earnings;
10. undistributed current year earnings (refer to paragraph 32 to 35 of this Prudential Standard);
11. accumulated other comprehensive income and other disclosed reserves (refer to paragraphs 36 and 37 to this Prudential Standard);
12. technical provisions[4] in surplus or deficit of those required by Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340)[5]; and
13. regulatory adjustments applied in the calculation of Common Equity Tier 1 Capital required under Attachment B to this Prudential Standard.
14. Current year earnings must take into account:
15. negative goodwill;
16. expected tax expenses; and
17. dividends when declared in accordance with Australian Accounting Standards.
18. Declared dividends for the purpose of paragraph 32(c) of this Prudential Standard may be reduced by the expected proceeds, as agreed in writing by APRA, of a Dividend Reinvestment Plan (DRP) to the extent that dividends are used to purchase new ordinary shares issued by the regulated institution. A regulated institution must review every six months the expected subscription for new ordinary shares under its DRP having regard to experience over previous years and reasonable expectations of the level of subscription that might apply in future. If a regulated institution identifies any material change in the expected level of future subscription for new ordinary shares under its DRP, it must notify APRA and obtain APRA's approval to a new amount by which declared dividends may be reduced for regulatory capital purposes.
19. Current year earnings include the full value of fee income not sourced from insurance policies (issued by general insurers and Lloyds) provided that:
20. the fee income has either been received in cash or has been debited by the general insurer to an account to be paid by the provider of the fees or otherwise forms part of the upfront fees owed to the general insurer;
21. outstanding amounts of fee income debited by the general insurer to the account are claimable in full in the event of default on the amounts receivable or capable of being sold to a third party as part of outstanding debts;
22. the provider of the fee income has no recourse