Article 52(1)(n) of Regulation (EU) No 575/2013 (CRR) requires Additional Tier 1 instruments to write down or convert to Common Equity Tier 1 (CET1) instruments on the occurrence of a "trigger event". Article 54(1)(a) of the CRR defines a trigger event as when the CET1 capital ratio of the institution referred to in Article 92(1)(a) of the CRR   falls below the specified trigger level, which must be at least 5.125% CET1. Article 11 of the CRR requires a consolidated group to meet the requirements set out in Parts Two , Three (which includes Article 92(1)(a)), to Four, of the CRR, which includes Article 92(1)(a), and Part Seven and Seven A of the CRR  on a consolidated basis, with the exception of point (d) of Article 430(1).

Additional Tier 1 instruments issued by a subsidiary institution should include a trigger based on the solvency requirements applicable to the subsidiary. If those requirements are on a solo basis, then the trigger should be on a solo basis. If those requirements are on a sub-consolidated basis, then the trigger should be on a sub-consolidated basis. If the subsidiary is subject to solvency requirements on both solo and sub-consolidated level, then it should have triggers on both a solo and sub-consolidated basis.

A trigger on the basis of the solvency requirement of the group is not mandatory, however, such a trigger is possible. Even if an instrument issued by a subsidiary includes such a trigger, it will not be included in full in the consolidated Tier 1 of the group as it will not be able to absorb losses at the level of the group. The provisions of Article 82 and 85 of the CRR would apply.

Instruments issued by subsidiaries in third countries shall comply with all requirements that are specified under the CRR and associated implementing regulations in order to be eligible at the level of the group. In particular, for the purposes of the definition of the trigger event referred to in point (a) of Article 54(1) of the CRR, point (e) of this Article further specifies that this trigger shall be calculated in accordance with the national law of that third country or contractual provisions governing the instruments, provided that the competent authority, after consulting the EBA, is satisfied that those provisions are at least equivalent to the requirements set out in this Article. the CET1 capital shall be calculated in accordance with the provisions of the CRR.