Document ID: chunk:federal_register_of_legislation:F2024C01248:reg:2:p5
Version: federal_register_of_legislation:F2024C01248
Segment Type: reg
Provision Reference: reg 2 (pt 5/10)
Character Range: 195844–198500

was issued by:
 (i) an ADI that is a bank or non‑mutual building society and that is regulated for prudential purposes by APRA; or
 (ii) a subsidiary of an ADI mentioned in subparagraph (i), being a subsidiary that is regulated with the ADI for prudential purposes by APRA; or
 (iii) an entity that has undertaken to comply with prudential standards, issued by APRA, that deal with capital adequacy and is regulated for prudential purposes by APRA; or
 (iv) a subsidiary of an entity mentioned in subparagraph (iii) that is covered by the undertaking mentioned in that subparagraph; or
 (v) an entity that is regulated for prudential purposes by a foreign prudential regulator that has a prudential regulatory role comparable to that of APRA and under ADI capital adequacy requirements comparable to those of APRA; and
 (e) does not give the issuer of the note an unconditional right to decline to provide a financial benefit that is equal in nominal value to the issue price of the note to settle the obligations under the note.

Meaning of profitability, insolvency or negative earnings conditions
 (4) Conditions applying to the obligation are profitability, insolvency or negative earnings conditions if they have the effect that the issuer of the note is able, or obliged, to defer the payment of the interest (with or without compounding) beyond the date on which it would otherwise be payable if, on that date:
 (a) profitability does not justify the payment; or
 (b) the issuer of the note is insolvent, or would become insolvent if the payment were made; or
 (c) a dividend has not been declared or paid on a class or classes of share capital of the issuer during a specified period that:
 (i) immediately precedes that date; and
 (ii) is no more than 24 months; or
 (d) the issuer's retained earnings are negative, or would be negative if the payment were made.

Obligations to pay before 16 March 2011
 (5) If the obligation is an obligation to pay at a time before 16 March 2011 this section applies only to the extent that applying it would not have the result that:
 (a) the rights of a person (other than the Commonwealth or an authority of the Commonwealth) immediately before that day would be affected so as to disadvantage that person; or
 (b) liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth) for anything done or omitted to be done before that day.
Note: The application of this section to a perpetual subordinated note does not mean that the note, together with one or more related schemes, cannot give rise to an equity interest.

974‑135.05  Term cumulative subordinated note