From smallcaps.com.au: APRA is phasing out bank hybrid securities, which currently hold $43 billion in investments, due to concerns they pose risks to the financial system.

This decision follows the loss of investor capital in Credit Suisse hybrids during its merger with UBS, prompting APRA to favour other capital instruments.

Financial advisers fear that the elimination of hybrids may push investors toward riskier assets and reduce access to cherished franking credits for tax benefits.