4.22. Criteria for third party interests— CET 1 Capital

(1)        For Rule 4.14 (e), CET1 Capital issued by a consolidated Subsidiary of a Bank and held by a third party as a non-controlling interest, may be included in the Bank’s CET 1 Capital if:

(a)        the share would be included in the Bank’s CET 1 Capital had it been issued by the Bank; and

(b)        the Subsidiary that issued the share is itself a Bank or a Broker Dealer (or an equivalent entity in its home jurisdiction).

(2)        The amount to be included in the consolidated CET 1 Capital of a Bank is calculated in accordance with the following formula:

NCI – ((CET1s – Min) × SS)

where:

NCI is the total of the non-controlling interests of minority shareholders in a consolidated Subsidiary of the Bank.

CET1s is the amount of CET 1 Capital of the Subsidiary.

Min is the lower of:

(a)        0.07 × total RWAs, as defined in Rule 4.7 (2), of the Subsidiary; and

(b)        0.07 × share of consolidated RWAs of the group attributable 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.