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Grandfathering of capital instruments
This question concerns two types of non-innovative Hybrid Tier 1 instruments (both issued before 31 December 2011):
-- Type A: securities with first call date occurred in year 5, and before 31 December 2012;
-- Type B: securities with first call date occurred in year 5, and after 31 December 2012.
1. For both A and B, is it correct to follow Article 484(4) & Article 486(3) for grandfathering guidelines?
2. For both A and B, is it correct to assume that the amount in excess of the applicable Tier 1 grandfathering percentage limit will be treated as grandfathered Tier 2 capital, i.e. being subject to the Tier 2 cap, as per Article 487(2)?
3. Alternatively, for both A and B, can the amount in excess of the applicable Tier 1 grandfathering percentage limit be treated as Tier 2 in full from 1 January 2014? Since they are meeting all the criteria for Tier 2 capital under Regulation (EU) No. 575/2013, as per Article 63 post the call date?