(1) The global systemically important BHC’s
common equity tier 1 capital (excluding any common equity tier 1 minority
interest);
(2) The
global systemically important BHC’s additional tier 1 capital (excluding
any tier 1 minority interest); and
(3) The global systemically important BHC’s
outstanding eligible external long-term debt amount plus 50 percent
of the amount due to be paid of unpaid principal of outstanding eligible
debt securities issued by the global systemically important BHC in,
as calculated in section 252.62(b)(2), greater than or equal to 365
days (one year) but less than 730 days (two years).
(1) Composition of the external TLAC risk-weighted buffer. The external
TLAC risk-weighted buffer is composed solely of common equity tier
1 capital.
(2) Definitions. For purposes of this paragraph,
the following definitions apply:
(i) Eligible retained income. The eligible retained income of a
global systemically important BHC is the greater of:
(A) The global
systemically important BHC’s net income, calculated in accordance
with the instructions to the FR Y-9C, for the four calendar quarters
preceding the current calendar quarter, net of any distributions and
associated tax effects not already reflected in net income; and
(B) The average of the global
systemically important BHC’s net income, calculated in accordance
with the instructions to the FR Y-9C, for the four calendar quarters
preceding the current calendar quarter.
(ii) Maximum external TLAC risk-weighted payout ratio. The maximum external TLAC risk-weighted payout ratio is the percentage
of eligible retained income that a global systemically important BHC
can pay out in the form of distributions and discretionary bonus payments
during the current calendar quarter. The maximum external TLAC risk-weighted
payout ratio is based on the global systemically important BHC’s external
TLAC risk-weighted buffer level, calculated as of the last day of
the previous calendar quarter, as set forth in Table 1 to section
252.63.
(iii) Maximum external TLAC risk-weighted payout amount. A global systemically important BHC’s maximum external TLAC risk-weighted
payout amount for the current calendar quarter is equal to the global
systemically important BHC’s eligible retained income, multiplied
by the applicable maximum external TLAC risk-weighted payout ratio,
as set forth in Table 1 to section 252.63.
(iv) Maximum
external TLAC leverage payout ratio. The maximum external TLAC
leverage payout ratio is the percentage of eligible retained income
that a global systemically important BHC can pay out
in the form of distributions and discretionary bonus payments during
the current calendar quarter. The maximum external TLAC leverage payout
ratio is based on the global systemically important BHC’s external
TLAC leverage buffer level, calculated as of the last day of the previous
calendar quarter, as set forth in Table 2 to section 252.63.
(v) Maximum external TLAC leverage payout amount. A global systemically
important BHC’s maximum external TLAC leverage payout amount for the
current calendar quarter is equal to the global systemically important
BHC’s eligible retained income, multiplied by the applicable maximum
TLAC leverage payout ratio, as set forth in Table 2 to section 252.63.
(3) Calculation of the external TLAC risk-weighted
buffer level.
(i) A global systemically important
BHC’s external TLAC risk-weighted buffer level is equal to the global
systemically important BHC’s common equity tier 1 capital ratio (expressed
as a percentage) minus the greater of zero and the following
amount:
(A) 18 percent; minus
(B) The ratio (expressed as a percentage)
of the global systemically important BHC’s additional tier 1 capital
(excluding any tier 1 minority interest) to its total risk-weighted
assets; and minus
(C) The ratio
(expressed as a percentage) of the global systemically important BHC’s
outstanding eligible external long-term debt amount plus 50 percent
of the amount of unpaid principal of outstanding eligible debt securities
issued by the global systemically important BHC due to be paid in,
as calculated in section 252.62(b)(2), greater than or equal to 365
days (one year) but less than 730 days (two years) to total risk-weighted
assets.
(ii) Notwithstanding paragraph (c)(3)(i) of this section, if the
ratio (expressed as a percentage) of a global systemically important
BHC’s external total loss-absorbing capacity amount as calculated
under paragraph (b) of this section to its risk-weighted assets is
less than or equal to 18 percent, the global systemically important
BHC’s external TLAC risk-weighted buffer level is zero.
(4) Limits on distributions and discretionary bonus
payments.
(i) A global systemically important
BHC shall not make distributions or discretionary bonus payments or
create an obligation to make such distributions or payments during
the current calendar quarter that, in the aggregate, exceed the maximum
external TLAC risk-weighted payout amount or the maximum external
TLAC leverage payout amount.
(ii) A global systemically important
BHC with an external TLAC risk-weighted buffer level that is greater
than the external TLAC risk-weighted buffer and an external TLAC leverage
buffer that is greater than 2.0 percent, in accordance with paragraph
(c)(5) of this section, is not subject to a maximum external TLAC
risk-weighted payout amount or a maximum external TLAC leverage payout
amount.
(iii) Except
as provided in paragraph (c)(4)(iv) of this section, a global systemically
important BHC may not make distributions or discretionary bonus payments
during the current calendar quarter if the global systemically important
BHC’s:
(A) Eligible retained income is negative;
and
(B) External TLAC
risk-weighted buffer level was less than the external TLAC risk-weighted
buffer as of the end of the previous calendar quarter or external
TLAC leverage buffer level was less than 2.0 percent as of the end
of the previous calendar quarter.
(iv) Notwithstanding the limitations
in paragraphs (c)(4)(i) through (iii) of this section, the Board may
permit a global systemically important BHC to make a distribution
or discretionary bonus payment upon a request of the global systemically
important BHC, if the Board determines that the distribution or discretionary
bonus payment would not be contrary to the purposes of this section,
or to the safety and soundness of the global systemically important
BHC. In making such a determination, the Board will consider the nature
and extent of the request and the particular circumstances giving
rise to the request.
(v) (A) A global systemically important
BHC is subject to the lowest of the maximum payout amounts as determined
under 12 CFR 217.11(a)(2), the maximum external TLAC risk-weighted
payout amount as determined under this paragraph, and the maximum
external TLAC leverage payout amount as determined under this paragraph.
(B) Additional limitations
on distributions may apply to a global systemically important BHC
under 12 CFR 225.4, 225.8, and 263.202.
(5) External TLAC leverage buffer.
(i) General. A global systemically important
BHC is subject to the lower of the maximum external TLAC risk-weighted
payout amount as determined under paragraph (c)(2)(iii) of this section
and the maximum external TLAC leverage payout amount as determined
under paragraph (c)(2)(v) of this section.
(ii) Composition
of the external TLAC leverage buffer. The external TLAC leverage
buffer is composed solely of tier 1 capital.
(iii) Calculation
of the external TLAC leverage buffer level.
(A) A global
systemically important BHC’s external TLAC leverage buffer level is
equal to the global systemically important BHC’s supplementary leverage
ratio (expressed as a percentage) minus the greater of zero
and the following amount:
(1) 7.5 percent; minus
(2) The ratio (expressed as a percentage) of the global systemically
important BHC’s outstanding eligible external long-term debt amount
plus 50 percent of the amount of unpaid principal of outstanding eligible
debt securities issued by the global systemically important BHC due
to be paid in in, as calculated in section 252.62(b)(2), greater than
or equal to 365 days (one year) but less than 730 days (two years)
to total leverage exposure.
(B) Notwithstanding paragraph
(c)(5)(iii) of this section, if the ratio (expressed as a percentage)
of a global systemically important BHC’s external total loss-absorbing
capacity amount as calculated under paragraph (b) of this section
to its total leverage exposure is less than or equal to 7.5 percent,
the global systemically important BHC’s external TLAC leverage buffer
level is zero.
Table 1 to section 252.63—Calculation of maximum external
TLAC risk-weighted payout amount
