INCOME TAX ASSESSMENT REGULATIONS 1997

PART 6 - THE DICTIONARY  

Division 974 - Debt and equity interests  

Subdivision 974-F - Related concepts  

REGULATION 974-135B   974-135B   NON-CUMULATIVE REDEEMABLE PREFERENCE SHARES ISSUED BY MUTUAL BUILDING SOCIETY  


For paragraph 974-135(8)(d) of the Act, the obligation in respect of the return of investment on the redemption of a non-cumulative redeemable preference share issued by a mutual building society is not an effectively non-contingent obligation if:


(a) the mutual building society is an ADI; and


(b) the share is issued on or after 4 March 2003; and


(c) the share satisfies, at the time it is issued, the criteria set out in section 7 of Guidance Note AGN 111.2 - Tier 2 Capital , published by APRA in September 2000; and


(d) the share is issued subject to the following terms and conditions:


(i) the share has a minimum term of 5 years;

(ii) dividend payments for the share are to be paid only:

(A) out of operating profits from the current year or the immediately previous year; and

(B) to the extent that payment is permitted by law and by relevant regulatory authorities;

(iii) dividend payments for the share are not cumulative;

(iv) any payments made in relation to the share out of net profits or net assets have preferential rights over payments made in relation to ordinary shares (if any) from the same sources;

(v) if the share is to be redeemed - the redemption cannot be carried out without the approval of the board of the mutual building society;

(vi) if the share is to be redeemed, but the redemption of the share would place the mutual building society in breach of a prudential standard made under the Banking Act 1959 - the redemption cannot be carried out without the approval of APRA; and


(e) the redemption is carried out on or after 4 March 2003; and


(f) the share is issued only to a member of the mutual building society; and


(g) a member of the mutual building society and its connected entities (within the meaning of subsection 995-1(1) of the Act) can together hold not more than 10% by value of the shares of that kind issued by the mutual building society.




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