Prudential Regulation Authority Rulebook

3A.1

The following basic own funds items shall be deemed to substantially possess the characteristics set out in 3.5, taking into consideration the features set out in 3.6, and a firm must classify them as Tier 1 own funds, where the following items display all of the features set out in 3B:

1. (1) the part of excess of assets over liabilities, valued in accordance with 2 of the Valuation Part and Technical Provisions Part, comprising the following items:
   1. (a) paid-in ordinary share capital and the related share premium account;
   2. (b) paid-in initial funds, members’ contributions or the equivalent basic own funds item for mutual and mutual-type undertakings;
   3. (c) paid-in subordinated mutual member accounts;
   4. (d) surplus funds that are not considered as insurance and reinsurance obligations in accordance with 2.1 of the Surplus Funds Part;
   5. (e) paid-in preference shares and the related share premium account; and
   6. (f) a reconciliation reserve calculated in accordance with 3C;
2. (2) paid-in subordinated liabilities valued in accordance with 2 of the Valuation Part.