Capital bylaw or board resolution to include equities in tier 1 and tier 2 capital.

CFR · 2024-01-01 · US · Title 12

In order to include otherwise eligible purchased and allocated equities in tier 1 capital and tier 2 capital, the System institution must adopt a capitalization bylaw, or its board of directors must adopt a binding resolution, which resolution must be acknowledged by the board on an annual basis in the capital adequacy plan described in § 615.5200, in which the institution undertakes the following, as applicable: (a) The institution shall obtain prior FCA approval under § 628.20(f) before: (1) Redeeming or revolving the equities included in common equity tier 1 (CET1) capital; (2) Redeeming or calling the equities included in additional tier 1 capital; and (3) Redeeming, revolving, or calling instruments included in tier 2 capital other than limited life preferred stock or subordinated debt on the maturity date. (b) The equities shall have a minimum redemption or revolvement period as follows: (1) 7 years for equities included in CET1 capital, except that the statutory borrower stock described in § 628.20(b)(1)(x) may be redeemed without a minimum holding period and that equities designated as unallocated retained earnings (URE) equivalents cannot be revolved without submitting a written request to the FCA for prior approval; (2) a minimum no-call, repurchase, or redemption period of 5 years for additional tier 1 capital; and (3) a minimum no-call, repurchase, redemption, or revolvement period of 5 years for tier 2 capital. (c) The institution shall submit to FCA a written re

official document · source cfr-2024 · id 12:§ 628.21