Prudential Regulation Authority Rulebook

7.1

A firm must notify the PRA in writing of its intention, or the intention of another member of its group that is not a firm but is included in the supervision on a consolidated basis of the firm, to issue a capital instrument that it considers will qualify under the CRR as an own funds instrument, including a situation where the issuer intends to issue the instrument pursuant to a note issuance programme (NIP). This rule does not apply in the situation described in 7.5 below.

7.2

A firm must give the notice required by 7.1 at least one month before the intended date of issuance unless there are exceptional circumstances which make it impracticable to give such a period of notice, in which event the firm must give as much notice as is reasonably practicable in those circumstances.

7.3

When giving notice under 7.1, the firm must:

1. (1) complete and submit the form referred to in 7.9(1) (Pre-Issuance Notification (PIN) Form);
2. (2) provide a copy of the draft terms and conditions of the capital instrument;
3. (3) subject to 7.4, provide a properly reasoned independent draft legal opinion from an appropriately qualified individual confirming that the capital instrument meets the conditions for qualification as the relevant type of own funds instrument; and
4. (4) where it considers that the capital instrument in 7.1 will qualify as an Additional Tier 1 instrument, provide a properly reasoned draft opinion by its auditors as to that capital instrument’s treatment under the applicable accounting framework.

7.4

Where a firm considers that the capital instrument notified in accordance with 7.1 will qualify as a Common Equity Tier 1 instrument, the rule in 7.3(3) does not apply. In this case, a firm must instead complete and submit the form referred to in 7.9(2) (CET1 Compliance Template).

7.5

Where:

1. (1) a firm has, within the 12 months prior to submission of a notified issuance, previously issued an own funds instrument and has complied with 7.1 in respect of that previous issuance;
2. (2) that firm intends the notified issuance in (1) to be in the same tier of capital as those previously issued own funds instruments and to be issued on identical terms to them, excluding (i) the issue date, (ii) the maturity date, (iii) the amount of the issuance, (iv) the currency of the issuance, or (v) the rate of interest payable by the issuer; and
3. (3) the notified issuance in (1) is designed so that it will constitute a compliant own funds instrument, as evidenced either by the legal opinion referred to in 7.3(3) or, in the case of a Common Equity Tier 1 instrument, by the form referred to in 7.9(2) (CET1 Compliance Template);

that firm must notify the PRA in writing, no later than the date of issue, of its intention or the intention of another member of its group that is not a firm but is included in the supervision on a consolidated basis to issue a capital instrument.

7.6

The rule in 7.5 applies whether or not the notified issuance is pursuant to a NIP.

7.7

The firm shall notify the PRA in writing of any change to the intended date of issue,, type of investors, type of own funds instrument or any other feature of the capital instrument to that previously notified to the PRA under 7.1.

7.8

A firm shall provide the PRA with a copy of the final terms and conditions as referred to in 7.3(2), a copy of the final legal opinion referred to in 7.3(3) and, if applicable, a copy of the final accounting opinion referred to in 7.3(4) without delay after the capital instrument is issued.

7.9

1. (1) The Pre-Issuance Notification (PIN) Form can be found here:
   http://www.bankofengland.co.uk/pra/Documents/supervision/activities/pincrrfirms.pdf
2. (2) The CET1 Compliance Template can be found here:
   http://www.bankofengland.co.uk/pra/Documents/supervision/activities/cet1template.pdf