BANK 3.3.6 Capital reductions

(1) A banking business firm must not reduce its capital and reserves without the Regulatory Authority's written approval.

Examples of ways to reduce capital
•   a share buyback or the redemption, repurchase or repayment of capital instruments issued by the firm
•   trading in the firm's own shares or capital instruments outside an arrangement agreed with the authority
•   a special dividend.
(2) A banking business firm planning a reduction must prepare a forecast (for at least 2 years) showing its projected capital after the reduction. The firm must satisfy the authority that the firm's capital will still comply with these rules after the reduction.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).