28.The purpose of calculating the threshold is to limit the significant investments in the common shares of unconsolidated financial institutions (banks, insurance and other financial entities) and deferred tax assets (arising from temporary differences) to 15% of the CET1 after all deduction (Deduction includes regulatory deductions and the amount of significant investments in the common shares of unconsolidated financial institutions and deferred tax assets in full).

29.Therefore, significant investments in the common shares of unconsolidated financial institutions and deferred tax assets may receive limited recognition of 10% CET1 individually (CET after regulatory adjustment outlined in section 3 of the Tier Capital Supply Standard).

30.The amount that is recognised will receive risk weight of 250% and the remaining amount will be deducted.

See Appendix 5 for an example.