3.Banks wishing to issue any type of capital, including AT1 and T2, must request approval of the Central Bank of the UAE prior to issuance of the instrument. The bank may only issue the intended capital component after having submitted documentation described in the Application Process in the Appendix to this Standard and after the Board of the Central Bank of the UAE has approved the issuance of the instrument.

4.The Central Bank requires banks to issue AT1 and T2 instruments that are simple and robust in absorbing loss. The capital instrument Standard intends to:

• •Ensure the soundness of individual institutions
• •Reduce the variety of capital instruments in the market
• •Regulate the quality of instruments issued in the UAE
• •Monitor the amount of capital being issued in the market; and
• •Enhance the financial stability of the banking sector.