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  • New guidance on applying market value substitution rules when there is a buy-back or redemption of hybrid securities

    We have released a practical compliance guideline (PCG) on our compliance approach for determining the market value of hybrid securities for investors holding their securities on capital account when there is a buy-back or redemption.

    The new guidance is titled PCG 2021/1 Application of market value substitution rules when there is a buy-back or redemption of hybrid securities – methodologies for determining market value for investors holding their securities on capital account.

    It has been released following the technical discussion paper, TDP 2020/1 Buy-back or redemption of certain hybrid securities: Methodologies for determining market value for investors holding their securities on capital account, which was published in February 2020.

    The new PCG provides guidance on how the market value substitution rules apply when there is a buy-back or redemption of hybrid securities. It sets out methodologies accepted by the ATO for determining the market value of hybrid securities for investors holding the securities on capital account.

    If you invest in hybrid securities and the hybrid securities are being bought back or redeemed, or you issue hybrid securities and you're considering buying-back or redeeming hybrid securities you previously issued, we encourage you to:

    Last modified: 18 Jan 2021QC 64551