Non-consolidated subsidiariesNon-consolidated subsidiaries

Non-consolidated subsidiaries

1. For the purposes of determining an ADI’s capital adequacy at Level 2, all banking and other financial activities (subject to paragraph 2 of this Attachment), both regulated and unregulated, conducted within the banking group must be consolidated.

2. Consolidation at Level 2 must cover the global operations of an ADI and its subsidiary entities, as well as any other controlled banking entities, securities entities and other financial entities, except for entities involved in the following business activities:

(a) insurance (including friendly societies and health funds);

(b) acting as manager, responsible entity, approved trustee, trustee or similar role in relation to funds management;

(c) non-financial (commercial) operations; and

(d) securitisation special purpose vehicles to which assets have been transferred in accordance with the requirements of Prudential Standard APS 120 Securitisation;

(e) provided APRA gives its written approval, securitisation special purpose vehicles, where the ADI is an originating ADI, which comply with all the requirements of Prudential Standard APS 120 Securitisation (APS 120) other than subparagraph 2(d) of Attachment B of APS 120 and the ADI has elected to deduct any holdings of subordinated tranche(s) from Tier 1 capital in accordance with subparagraphs 39(pp) and 44(pp) of APS 111 Capital Adequacy: Measurement of Capital.