4.23. Criteria for third party interests—AT1 Capital

(1) For Rule 4.16 (c), an instrument (including a common share) 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 AT1 Capital if the instrument would be included in the Bank’s AT1 Capital had it been issued by the Bank.

(2) Subject to (3), the amount to be included in the consolidated AT1 Capital of a Bank is calculated in accordance with the following formula: NCI – ((T1s – Min) × SS) where: NCI is the total of the non-controlling interests of third parties in a consolidated Subsidiary of the Bank. T1s is the amount of Tier 1 Capital of the Subsidiary. Min is the lower of:

1. (a) 8.5% of the total RWAs, as defined in Rule 4.7 (2), of the Subsidiary; and
2. (b) 8.5% of the 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 additional Tier 1 Capital) held by those third parties.

(3) A Bank must determine the amount of qualifying T1 Capital of a Subsidiary that is included in consolidated AT1 Capital by excluding the minority interests of that Subsidiary that are included in consolidated CET1 Capital, in accordance with Rule 4.22.