BANK 3.2.17 Criteria for third party interests — additional tier 1 capital

(1) For rule 3.2.10(c), an instrument (including 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 additional tier 1 capital if the instrument would be included in the firm's additional tier 1 capital had it been issued by the firm.

Note Any amount already included in CET 1 capital must not be included in additional tier 1 capital — see rule 3.2.10(c).
(2) The amount to be included in the consolidated additional tier 1 capital of a banking business firm is calculated in accordance with the following formula:

NCI((T1sMin) × SS)

where:

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

T1s is the amount of additional tier 1 capital of the subsidiary.

Min is the lower of:

(a) 1.07 × (minimum additional tier 1 capital requirement of the subsidiary); and
(b) 1.07 × (the part of the consolidated minimum additional tier 1 capital requirement that relates to the subsidiary).
SS means the percentage of the shares in the subsidiary (being shares included in additional tier 1 capital) held by those third parties.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).