BANK 3.2.16 Criteria for third party interests — common equity tier 1 capital

(1) For rule 3.2.8 (e), a common share, issued by a consolidated subsidiary of a banking business firm and held by a third party as a non-controlling interest, may be included in the firm's CET 1 capital if:
(a) the share would be included in the firm's CET 1 capital had it been issued by the firm; and
(b) the subsidiary that issued the share is itself a deposit-taker or investment dealer (or an equivalent entity in its home jurisdiction).
(2) The amount to be included in the consolidated CET 1 capital of a banking business firm is calculated in accordance with the following formula:

NCI((CET1sMin) × SS)


where:

NCI is the total of the non-controlling interests of third parties in a consolidated subsidiary of the firm.

CET1s is the amount of CET 1 capital of the subsidiary.

Min is the lower of:

(a) 1.07 × (minimum CET 1 capital requirement of the subsidiary); and
(b) 1.07 × (the part of the consolidated minimum CET 1 capital requirement that relates to the subsidiary).
SS means the percentage of the shares in the subsidiary (being shares included in CET 1 capital) held by those third parties.
Amended by QFCRA RM/2015-3 (as from 1st January 2016).