PRU 3.12.4

Subject to the following Rules in this Section, an Authorised Person must deduct the following from the calculation of its T2 Capital:

(a) direct and indirect holdings by an Authorised Person of own T2 Capital instruments, including own T2 instruments that an Authorised Person could be obliged to purchase as a result of existing contractual obligations;
(b) holdings of the T2 Capital instruments of Relevant Entities where those entities have a reciprocal cross holding with the Authorised Person which have the effect of artificially inflating the Capital Resources of the Authorised Person;
(c) the amount of direct and indirect holdings by the Authorised Person of the T2 Capital instruments of Relevant Entities where the Authorised Person does not have a significant investment in those entities; and
(d) direct and indirect holdings by the Authorised Person of the T2 Capital instruments of Relevant Entities where the Authorised Person has a PRU VER06.201218 84 significant investment in those entities, excluding Underwriting positions held for fewer than five working days.