Regulation 24

Where a constituent entity of an MNE group records an amount of decrease in its equity for a financial year that is attributable to distributions paid or payable in respect of additional tier one capital issued by the constituent entity and the same amount is not taken into account in its FANIL for that financial year, its FANIL for that financial year must be adjusted to take that amount into account as an expense.

Where a constituent entity of an MNE group records an amount of increase in its equity for a financial year that is attributable to distributions received or receivable in respect of additional tier one capital held by the constituent entity and the same amount is not taken into account in its FANIL for that financial year, its FANIL for that financial year must be adjusted to take that amount into account as income.

In this regulation, “additional tier one capital” means an instrument issued by an entity pursuant to regulatory requirements applicable to the banking or insurance sector that is convertible to equity or written down if a pre‑specified trigger event occurs and that has other features which are designed to aid loss absorbency in the event of a financial crisis.