Document ID: chunk:federal_register_of_legislation:F2022L01562:body:0:p39
Version: federal_register_of_legislation:F2022L01562
Segment Type: other
Provision Reference: 
Character Range: 101473–104338

mechanism that requires a holder to sell the instrument to a nominated party other than the issuer or a related entity of the issuer will not constitute an incentive to redeem provided there is at least two years from the date upon which the holder is required to sell the instrument to the nearest subsequent date upon which conversion may be exercised.
35.         Where an instrument is drawn down in a series of tranches, it must meet the requirements in this Prudential Standard as if each tranche is a separate Additional Tier 1 Capital instrument in its own right.
36.         The documentation of any debt or other capital instrument of the issuer of an Additional Tier 1 Capital instrument must not include any of the following clauses:
(a)          a cross-default clause linking the issuer's obligations under the Additional Tier 1 Capital instrument to default by the issuer under any of its other obligations, or default by another party (related or otherwise) under the debt or other capital instrument;[41] or
(b)          an event of default clause specifying an event relating to the Additional Tier 1 Capital instrument that brings the issuer into default under the debt or other capital instrument.
37.         For the purposes of paragraph 36(b) of this Attachment, an event of default clause includes a clause specifying the following events:
(a)          the exercise or non-exercise of discretions within the Additional Tier 1 Capital instrument;
(b)          an adverse event or change, however so described or determined, occurring in respect of the Additional Tier 1 Capital instrument; and
(c)          any consequence arising from, or any action taken or intended to prevent,[42] the above events or a default by the issuer under the Additional Tier 1 Capital instrument,
but does not include a clause specifying the irrevocable winding-up (that is, either by or an effective resolution by shareholders or members for winding-up, or a court order has been made, and the time for the appeal of the decision has passed) of the issuer.
38.         Where issue documentation, or marketing an instrument, or any ongoing dealings with investors in the instrument, suggest the instrument has attributes not consistent with the eligibility requirements in this Attachment, the instrument will be ineligible to be included in the ADI's Additional Tier 1 Capital.
39.         The instrument, whether issued by the ADI or another member of the Level 2 group to which the ADI belongs (including overseas subsidiaries) may be subject to the laws of a foreign country, except that the terms of the instrument that relate to:
(a)          loss absorption conversion or write-off (where relevant); and
(b)          non-viability conversion or write-off
must be subject to the laws of an Australian jurisdiction.
40.         Where the instrument, whether