Market Consultation Methodology Amendment: Treatment of AT1 Instruments Issued by Australian Banks in Solactive Australian Banking Preferred Shares Index

Overview

Solactive AG is conducting this market consultation regarding a proposed amendment to the selection rules of the below indices (the “Index”).

Solactive Australian Banking Preferred Shares NTR Index [. SAUBPFRN, DE000SL0BBU8]

Solactive Australian Banking Preferred Shares GTR Index [. SAUBPFRG, DE000SL0BBT0]

This proposal follows the announcement by the Australian Prudential Regulation Authority (APRA) to phase out Additional Tier 1 (AT1) capital instruments from 2027 onwards. APRA’s decision aims to simplify the bank capital framework and improve financial system resilience during times of crisis by replacing AT1 instruments with more reliable forms of capital, such as Tier 2 and Common Equity Tier 1 (CET1).

Further details on the APRA web page: APRA to phase out AT1 as eligible bank capital | APRA).

Proposed Change to the Index Methodology

As the availability of new AT1 issuances will cease due to the APRA decision, the Index Committee has reviewed and approved the following amendments to the index methodology:

Removal of the existing selection rule:

“The instruments must have at least 12 months until first call date at each rebalancing date.”

Addition of the new selection rule:

“AT1 Bonds issued prior to the SELECTION DATE, and which were already part of the index, will not be included in the INDEX again. However, all existing AT1 Bonds already in the index will remain included until their first call date.”