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BRIEF-APRA Adjusts Capital Framework For ADIs To Support Establishment Of Australian Business Growth Fund

Published 09/12/2019, 12:14 pm
Updated 09/12/2019, 12:21 pm
© Reuters.  BRIEF-APRA Adjusts Capital Framework For ADIs To Support Establishment Of Australian Business Growth Fund

Dec 9 (Reuters) - Australian Prudential (LON:PRU) Regulation Authority:

* RELEASES LETTER TO ADIS ON CAPITAL TREATMENT OF INVESTMENTS IN AUSTRALIAN BUSINESS GROWTH FUND

* ADJUSTING ITS CAPITAL FRAMEWORK FOR AUTHORISED DEPOSIT-TAKING INSTITUTIONS TO SUPPORT ESTABLISHMENT OF AUSTRALIAN BUSINESS GROWTH FUND

* AN ADI THAT INVESTS IN THE ABGF WILL BE ABLE TO APPLY A RISK WEIGHT OF 250 PER CENT TO THEIR INVESTMENT

* TO ENSURE RISKS TO ADIS OF INVESTING IN ABGF ARE CONTAINED, AN ADI WILL ONLY BE ABLE TO INVEST UP TO 2 % OF ITS LEVEL 1 CET1 CAPITAL IN ABGF

* ANY ADDITIONAL EQUITY INVESTMENT BEYOND 2% WILL NOT BE ELIGIBLE FOR THE 250 PER CENT RISK WEIGHT

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