Prudential Regulation Authority Rulebook

7B.1

Where a firm, or another member of its group that is not a firm but is included in the supervision on a consolidated basis of the firm, intends to:

1. (1) issue a capital instrument that it considers will qualify under Part Two of CRR as an Additional Tier 1 instrument; or
2. (2) amend or otherwise vary the terms of such an instrument included in its own funds or the own funds of its consolidation group;

the firm shall, at least one month before the intended date of issuance or intended date of amendment or variation, as applicable, notify the PRA of that intention, except that where there are exceptional circumstances which make it impracticable to give such a period of notice, the firm must give as much notice as is reasonably practicable in those circumstances.

7B.2

When notifying the PRA under 7B.1 the firm must:

1. (1) complete and submit the form referred to in 7D.3(1) (Pre/Post-Issuance Notification (PIN) Form);
2. (2) provide a copy of the draft terms and conditions of the capital instrument together with any side agreement;
3. (3) provide a properly reasoned draft independent legal opinion from an appropriately qualified individual confirming that the capital instrument qualifies as an Additional Tier 1 instrument under Part Two of CRR; and
4. (4) provide a properly reasoned draft opinion by its auditors as to the capital instrument’s treatment under the applicable accounting framework.

7B.3

Where a firm has previously complied with these rules in respect of the issuance of an Additional Tier 1 instrument and that firm or another member of its group that is not a firm but is included in the supervision on a consolidated basis of the firm, intends to:

1. (1) issue a capital instrument on substantially the same terms as the previously notified issuance; or
2. (2) amend or otherwise vary the previously notified issuance in a way which will result in the instrument taking effect on substantially the same terms as that issuance;

7B.1 and 7B.2 shall not apply.

7B.4

Where 7B.1 and 7B.2 does not apply by virtue of 7B.3 the firm shall:

1. (1) give the notice of the issuance to the PRA sufficiently in advance of the capital instrument’s classification as an Additional Tier 1 instrument or, in the case of an amendment or variation, sufficiently in advance of that amendment or variation taking effect;
2. (2) send to the PRA written confirmation that the capital instrument will:
1. (a) be issued on substantially the same terms as the previously notified issuance or in the case of an amendment or variation, the instrument as so amended or varied, will take effect on substantially the same terms as the previously notified issuance; and
2. (b) qualify as an Additional Tier 1 instrument under Part Two of CRR;
3. (3) complete and submit the form referred to in 7D.3(1) (Pre/Post-Issuance Notification (PIN) Form); and
4. (4) send to the PRA a copy of the terms and conditions of the instrument or, in the case of an amendment or variation, the instrument as it is proposed to be amended or varied, together with any side agreement.