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In the principal Act, in Part 7, after Division 2, insert —“Division 3 — Total loss-absorbing capacityInterpretation of this Division57A. In this Division, unless the context otherwise requires —“Division 6 FI” or Division 6 financial institution and “eligible instrument” have the meanings given by section 80(1);“loss-absorbing instrument”, in relation to a Division 6 FI, means —

an ordinary share of the Division 6 FI; or

an instrument or a liability that is an eligible instrument in relation to that Division 6 FI, that satisfies the criteria set out in a written notice issued under section 57B;“total loss-absorbing capacity”, in relation to a Division 6 FI, means the sum of the values of the following, determined in accordance with a written notice issued under section 57B:

any loss-absorbing instrument (not being a liability) that has been issued by the Division 6 FI;

any loss-absorbing instrument that is a liability that is owed by the Division 6 FI;

any other financial resource that the Division 6 FI holds,that may be used to absorb losses of the Division 6 FI and to facilitate the recapitalisation of the Division 6 FI.Total loss-absorbing capacity requirements57B.—

The Authority may, by written notice, impose requirements on any Division 6 FI or class of Division 6 FIs in relation to the total loss‑absorbing capacity that the Division 6 FI or each Division 6 FI within the class is to maintain.

Without limiting subsection (1), the Authority may in a notice issued under that subsection —

specify the level (which may be expressed in the form of a ratio) of total loss‑absorbing capacity which a Division 6 FI is to maintain;

specify the method for calculating the total loss‑absorbing capacity and the level mentioned in paragraph (a);

specify the criteria that an eligible instrument must satisfy to qualify as a loss‑absorbing instrument, including (in the case of an eligible instrument that is issued by a Division 6 FI) the class or classes of investors to which such eligible instruments must be issued;

specify the types of financial resources that may be treated as part of a Division 6 FI’s total loss‑absorbing capacity; and

require a Division 6 FI to disclose to the public, in the form and manner and containing the information specified in the notice —

the level and composition of the total loss‑absorbing capacity maintained by the Division 6 FI; and

the order of priority the Division 6 FI’s loss‑absorbing instruments will rank in the event of a winding‑up of the Division 6 FI.

A notice under subsection (1) may make different provisions for different classes of Division 6 FIs.

The Authority may, if it considers appropriate in the particular circumstances of a Division 6 FI (X), by a further written notice to X, vary any requirement imposed by a notice under subsection (1) on a class of Division 6 FIs to which X belongs, in relation to X.

It is not necessary to publish any notice issued under subsection (1) or (4) in the Gazette.

The Authority may at any time vary, rescind or revoke any notice issued under subsection (1) or (4).

A Division 6 FI that does not comply with a notice of the Authority under subsection (1) or (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction.”.