X1PART TWO OWN FUNDS AND ELIGIBLE LIABILITIES
TITLE IELEMENTS OF OWN FUNDS
CHAPTER 2Common Equity Tier 1 capital
Section 1Common Equity Tier 1 items and instruments
Article 29Capital instruments issued by mutuals, cooperative societies, savings institutions and similar institutions
1.
Capital instruments issued by mutuals, cooperative societies, savings institutions and similar institutions shall qualify as Common Equity Tier 1 instruments only if the conditions laid down in Article 28 with modifications resulting from the application of this Article are met.
2.
The following conditions shall be met as regards redemption of the capital instruments:
(a)
except where prohibited under applicable national law F1of the United Kingdom, or any part of it, or of a third country, the institution shall be able to refuse the redemption of the instruments;
(b)
where the refusal by the institution of the redemption of instruments is prohibited under applicable national law F2of the United Kingdom, or any part of it, or of a third country, the provisions governing the instruments shall give the institution the ability to limit their redemption;
(c)
refusal to redeem the instruments, or the limitation of the redemption of the instruments where applicable, may not constitute an event of default of the institution.
3.
The capital instruments may include a cap or restriction on the maximum level of distributions only where that cap or restriction is set out under applicable national law F3of the United Kingdom, or any part of it, or of a third country or the statute of the institution.
4.
Where the capital instruments provide the owner with rights to the reserves of the institution in the event of insolvency or liquidation that are limited to the nominal value of the instruments, such a limitation shall apply to the same degree to the holders of all other Common Equity Tier 1 instruments issued by that institution.
The condition laid down in the first subparagraph is without prejudice to the possibility for a mutual, cooperative society, savings institution or a similar institution to recognise within Common Equity Tier 1 instruments that do not afford voting rights to the holder and that meet all the following conditions:
(a)
the claim of the holders of the non-voting instruments in the insolvency or liquidation of the institution is proportionate to the share of the total Common Equity Tier 1 instruments that those non-voting instruments represent;
(b)
the instruments otherwise qualify as Common Equity Tier 1 instruments.
5.
Where the capital instruments entitle their owners to a claim on the assets of the institution in the event of its insolvency or liquidation that is fixed or subject to a cap, such a limitation shall apply to the same degree to all holders of all Common Equity Tier 1 instruments issued by the institution.
6.
F4The F5PRA may make technical standards to specify the nature of the limitations on redemption necessary where the refusal by the institution of the redemption of own funds instruments is prohibited under applicable national law F6of the United Kingdom, or any part of it, or of a third country.
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