APRA reviews Tier 1 capital for ADI’s

APRA has issued a Response to Submissions in respect of its August 2005 discussion paper on the adoption of
International Financial Reporting Standards (IFRS), covering Tier 1
capital and securitisation.

The Response addresses the issues raised by respondents, particularly on
the characteristics of Tier 1 capital instruments. Released concurrently
with the paper are a draft prudential standard and guidance notes on the proposed capital requirements for ADIs (Tier 1 capital guidance note and Tier 2 Capital guidance note).

APRA intends to proceed with the definitions of Tier 1 instruments as proposed with some clarifications and refinements.

APRA proposes to issue the new prudential standards for ADIs late in the second quarter of 2006, to come into effect on 1 July 2006. New Tier 1 capital limits will be effective from 1 January 2008.

Written submissions on the draft prudential standard and guidance notes should be submitted by Friday 28 April 2006.

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