Document ID: chunk:federal_register_of_legislation:F2023L00684:body:0:p6
Version: federal_register_of_legislation:F2023L00684
Segment Type: other
Provision Reference: 
Character Range: 12980–15775

or cancelled, and the statutory or contractual terms of the instrument must not include any feature that may give rise to such an expectation. A regulated institution or any other members of the group, must not assume, or create market expectations, that supervisory approval will be forthcoming for the regulated institution or any other members of the group, to buy back, redeem or cancel an instrument.
24. A regulated institution 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.
25. A regulated institution 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.
26. Where the terms of a capital instrument depart from established precedent, a regulated institution must consult with APRA on the eligibility of the instrument for inclusion in a category of the regulated institution's capital base in advance of the issuance of the instrument, and provide APRA with all information it requires to assess the eligibility of the instrument.
27. As part of the documentation provided for the purposes of paragraphs 26 and 27 of this Prudential Standard, a regulated institution must include a statement of compliance of the capital instrument signed by a senior manager of the regulated institution, or if issued by a member of the Level 2 insurance group, signed by a senior manager of the regulated institution or authorised NOHC with group responsibility. The statement must:
28. address how the issuer is satisfied that each required capital eligibility criterion set out in this Prudential Standard is met and will continue to be met in the future; and
29. clearly set out references to supporting documents and opinions that demonstrate that the criteria are met.
29. A regulated institution must obtain APRA's written approval before the terms of an instrument are altered in a way that may affect its eligibility as a component of the capital base.

Common Equity Tier 1 Capital
 1. Common Equity Tier 1 Capital comprises the highest quality components of capital that fully satisfy all of the following characteristics:
 2. provide a permanent and unrestricted commitment of funds;
 3. are freely available to absorb losses;
 4. do not impose any unavoidable servicing 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