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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER33/02-19]
PIB 3 Capital
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  Versions
(1 version)
 
Dec 9 2012 onwards

PIB 3.15.3



Whole Section PDF

The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

(1) For the purpose of PIB Rule 3.15.2(a), a capital instrument is eligible for inclusion in T2 Capital where all the following conditions are met:
(a) the instruments are issued and fully paid-up;
(b) the instruments are not purchased by any of the following:
(i) the Authorised FirmG or its SubsidiariesG ;
(ii) an UndertakingG in which the Authorised FirmG has participation in the form of ownership, direct or by way of control, of 20% or more of the voting rights or capital of that UndertakingG ;
(c) the purchase of the instruments is not funded directly or indirectly by the Authorised FirmG ;
(d) the claim on the principal amount of the instruments under the provisions governing the instruments is wholly subordinated to claims of all non-subordinated creditors;
(e) the instruments are not secured, or guaranteed by any of the following:
(i) the Authorised FirmG or its SubsidiariesG ;
(ii) any ParentG of the Authorised FirmG or their SubsidiariesG ;
(iii) any member of the Financial GroupG to which the Authorised FirmG belongs; or
(iv) any UndertakingG that has Close LinksG with entities referred to in (i) to (iii);
(f) the instruments are not subject to any arrangement that otherwise enhances the seniority of the claim under the instruments;
(g) the instruments have an Original MaturityG of at least 5 years;
(h) the provisions governing the instruments do not include any incentive for them to be redeemed by the Authorised FirmG ;
(i) where the instruments include one or more call options, the options are exercisable at the sole discretion of the IssuerG ;
(j) the instruments may be called, redeemed or repurchased only where the Authorised FirmG has notified the DFSAG of its intention to call, redeem or repurchase the instruments in writing and well in advance, and not before 5 years after the date of issuance of the respective instruments;
(k) the provisions governing the instruments do not indicate or suggest that the instruments would or might be redeemed or repurchased other than at maturity and the Authorised FirmG does not otherwise provide such an indication or suggestion;
(l) the provisions governing the instruments do not give the holder the right to accelerate the future scheduled payment of interest or principal, other than in the insolvency or liquidation of the Authorised FirmG ;
(m) the level of interest or dividend payments due on the instruments will not be modified based on the credit standing of the Authorised FirmG , its ParentG or any member of its Financial GroupG ; and
(n) where the instruments are not issued directly by the Authorised FirmG or by an operating entity within its Financial GroupG , or by its ParentG , the proceeds are immediately available without limitation in a form that satisfies the conditions laid down in this RuleG to any of the following:
(i) the Authorised FirmG ;
(ii) an operating entity within its Financial GroupG ; or
(iii) any ParentG of the Authorised FirmG .
(2) The extent to which T2 Capital instruments can be considered as eligible for inclusion in T2 Capital during the final 5 years of maturity of those instruments is calculated by multiplying the result derived from the calculation in (a) by the amount referred to in (b):
(a) the nominal amount of the instruments on the first day of the final 5 year period of their contractual maturity divided by the number of calendar days in that period;
(b) the number of remaining calendar days of contractual maturity of the instruments.
(3) The following must apply where, in the case of a T2 Capital instrument, the conditions laid down in this RuleG cease to be met:
(a) that instrument must cease to qualify as a T2 Capital instrument; and
(b) the part of the share premium accounts that relates to that instrument must cease to qualify as a T2 Capital element.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]