BIPRU TP 18 Large exposures: Exemptions for intra-group exposures for building societies
1Application |
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18.1 |
R |
This section applies to a building society. |
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18.2 |
R |
This section does not apply to a building society that applies BIPRU TP 3 (Pre CRD capital requirements applying on a solo basis during 2007). |
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18.3 |
G |
The reason for BIPRU TP 18.2 R is that BIPRU TP 18 reproduces (with amendments) part of the large exposures requirements of Volume 1 of IPRU(BSOC). If a firm applies BIPRU TP 3 (Pre CRD capital requirements applying on a solo basis during 2007) all the large exposure requirements of IPRU(BSOC) will apply. There is therefore no need to apply BIPRU TP 18 in these circumstances. |
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Purpose |
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18.4 |
G |
This section reproduces, with amendments, paragraphs 7.5.1 to 7.5.3 of Chapter 7 of volume 1 of IPRU(BSOC). However it does not carry forward the 300% limit in paragraph 7.4.2(2) of that volume. |
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Duration of transitional |
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18.5 |
R |
This section applies until 31 December 2009. |
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General rule |
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18.6 |
R |
BIPRU 10.5.6 R (25% exposure limit) does not apply to an exposure of a building society to a subsidiary undertaking of the building society. Instead the building society must ensure that: |
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(1) |
the total amount of its exposures to any single subsidiary undertaking within the building society's UK consolidation group or to any sub-group of such subsidiary undertakings does not exceed 20% of its capital resources; and |
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(2) |
the total amount of its exposures to its subsidiary undertakings that are not within the building society's UK consolidation group does not exceed 20% of its capital resources. |
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18.7 |
G |
Exposures to subsidiary undertakings still count towards the overall limit of 800% of capital resources as set out in BIPRU 10.5.8 R unless otherwise exempted. |
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Effect of BIPRU TP 18 on concentration risk exemptions in BIPRU 10 |
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18.8 |
R |
A building society must choose between applying this section to all its exposures to its subsidiary undertakings or to none of them. |
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18.9 |
R |
If a building society applies this section, BIPRU 10.8 to BIPRU 10.10 (Integrated groups) do not apply. |
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18.10 |
G |
If a firm applies this section, BIPRU 10.7 (Treasury concession and intra-group securities financing transactions) continues to apply. |
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Notification |
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18.11 |
R |
BIPRU TP 17.18R to BIPRU TP 17.22R (Notification) apply to this section as they do to BIPRU TP 17 (Large exposures: Exemptions for intra-group exposures for banks and investment firms). |
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Consolidation |
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18.12 |
G |
The application of this section on a consolidated basis is dealt with in BIPRU TP 19 (Large exposures: Exemptions for intra-group exposures on a consolidated basis). |
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