Banks Act, 1990 (Act No. 94 of 1990)

Regulations

Regulations relating to Banks

Chapter II : Financial, Risk-based and other related Returns and Instructions, Directives and Interpretations relating to the completion thereof

38. Capital Adequacy, Leverage and TLAC

Capital Adequacy, Leverage and TLAC - Directives and interpretations for completion of monthly return concerning capital adequacy, leverage and TLAC (Form BA 700)

Subregulation (10) Matters related to TLAC

Purchase

[Regulation 38(10) heading substituted by section 9(y) of Notice No. 943, GG46159, dated 31 March 2022 : effective 1 April 2022]

(10)	Matters related to TLAC

(a)	Whenever a bank or controlling company is required to calculate—

(i)

its qualifying TLAC or available amount of TLAC, the bank or controlling company, as the case may be, shall in addition to any deduction from capital and reserve funds of shares, instruments or liabilities included in the bank or controlling company's relevant amount of capital and reserve funds, deduct from its TLAC resources the relevant amount related to any direct or indirect investment in or direct or indirect funding provided for direct or indirect investment in or holding of the bank or controlling company's own other TLAC instruments or liabilities;

(ii)

the relevant amount to be deducted from its capital and reserve funds in respect of its investment in or holding of other TLAC instruments or liabilities issued by a G-SIB, the bank or controlling company shall use the relevant latest available percentage related to its TLAC holdings, published by that relevant G-SIB for that relevant deduction;

(b)

Whenever a bank or controlling company is required to calculate the relevant adjustment to or deduction from its common equity tier 1 capital and reserve funds and its tier 2 capital and reserve funds, as respectively envisaged in subregulations (5)(a)(i) and (5)(a)(iii), the bank or controlling company shall add to any relevant amount related to capital instruments respectively calculated in terms of the provisions of subregulation (5)(a)(i)(L) and subregulation (5)(a)(i)(M), the relevant net long position in any direct or indirect investment, including any relevant synthetic investment or underwriting position held for longer than five working days, in other TLAC instruments or liabilities of the bank , financial entity or insurance entity that falls outside the scope of consolidation in terms of the provisions of these Regulations, irrespective of whether the relevant investment or holding of other TLAC instruments or liabilities is held in the banking book or trading book, provided that—

(i)	as stated hereinbefore, in order to determine the appropriate amount to be deducted, a bank or controlling company shall look through holdings of index securities to determine the actual underlying holdings of other TLAC instruments or liabilities of that relevant entity;

(ii)

when a bank or controlling company finds it operationally burdensome to look through and monitor its exact exposure to the other TLAC instruments or liabilities of those relevant entities or institutions as a result of its holdings of index securities, the bank or controlling company may obtain the prior written approval of the Authority to use a conservative estimate, which estimate shall be well founded and duly motivated by the relevant applicant bank or controlling company.

[Regulation 38(10) substituted by section 9(y) of Notice No. 943, GG46159, dated 31 March 2022 : effective 1 April 2022]