1. Capital instruments shall qualify as Common Equity Tier 1 instruments only if all the following conditions are met:
(a) the instruments are issued directly by the institution with the prior approval of the owners of the institution or, where permitted under applicable national law, the management body of the institution;
(b)the instruments are fully paid up and the acquisition of ownership of those instruments is not funded directly or indirectly by the institution;
(c) the instruments meet all the following conditions as regards their classification:
(i) they qualify as capital within the meaning of Article 22 of Directive 86/635/EEC;
(ii) they are classified as equity within the meaning of the applicable accounting framework;
(iii) they are classified as equity capital for the purposes of determining balance sheet insolvency, where applicable under national insolvency law;
(d) the instruments are clearly and separately disclosed on the balance sheet in the financial statements of
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