CA-2.1.9
A hybrid capital instrument may only be included in
(a) It is unsecured, subordinated and fully paid-up;
(b) It is not redeemable at the initiative of the holder, nor without the prior consent of the CBB;
(c) It is available to participate in losses without the investment firm licensee being obliged to cease trading (unlike conventional subordinated debt); and
(d) Although the capital instrument may carry an obligation to pay interest that cannot permanently be reduced or waived (unlike dividends on ordinary shareholders' equity), it allows such obligations to be deferred (as with cumulative preference shares) where the profitability of the investment firm licensee would not support payment.
Amended: January 2007