APRA has sent a letter to ADIs setting out various transition arrangements leading up to commencement of the Basel III framework from 1 January 2013.

APRA has confirmed that, until the end of 2012, eligible Tier 1 capital instruments must continue to satisfy all relevant criteria contained in Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111). In addition, APRA has confirmed that it is prepared, on an interim basis, to accept newly issued capital instruments as being eligible for transitional treatment as Additional Tier 1 capital under the Basel III framework, on the basis that they meet the current eligibility requirements in APS 111 and the criteria set out in the Attachment.