GENPRU TP 8A Further miscellaneous capital resources definitions for BIPRU firms

Application and interpretation

8A.1

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1This section applies to a BIPRU firm. In this section a reference to 30 December 2010 means 23.59 on 30 December 2010.

Tier one capital

8A.2

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Until 31 December 2040 a BIPRU firm may treat a capital instrument as eligible for inclusion as hybrid capital, if it would not otherwise be eligible, if:

(1)

on 30 December 2010 the BIPRU firm was subject to GENPRU; and

(2)

as at 30 December 2010 the BIPRU firm included it, and was entitled to include it, at stage B or C of the calculation in the capital resources table.

8A.3

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If a BIPRU firm treats a capital instrument as eligible for inclusion as hybrid capital under GENPRU TP8A.2R, then the firm:

(1)

if it included the capital instrument as innovative tier one capital as at 30 December 2010, must treat the capital instrument as hybrid capital included at stage C of the calculation in the capital resources table;

(2)

except where it is a building society, must apply the limit in GENPRU 2.2.30AR (3) to the aggregate of the capital instruments treated under (1) and the hybrid capital that is eligible under GENPRU 2.2 for inclusion at stage C of the calculation in the capital resources table;

(3)

in the case of a building society, must not include hybrid capital at stage C of the calculation in the capital resources table under GENPRU 2.2, except as provided by (4), if the amount of PIBS with incentives to redeem treated under GENPRU TP8A.2R exceeds the limit in GENPRU 2.2.30AR (3);

(4)

in the case of a building society, may include hybrid capital at stage C of the calculation in the capital resources table, notwithstanding (3), if the firm issued it after 30 December 2010 and:

(a)

the capital instrument would otherwise be eligible for inclusion as hybrid capital at stage C of the calculation in the capital resources table under GENPRU 2.2; and

(b)

the firm issued it in order to replace a PIBS with an incentive to redeem that the firm treated as hybrid capital under GENPRU TP8A.2R;

(5)

must not include hybrid capital at stage B2 of the calculation in the capital resources table under GENPRU 2.2, except as provided by GENPRU TP8A.4R, if and to the extent that the aggregate of the following exceeds the limit in GENPRU 2.2.30AR (2)

(a)

capital instruments included at stage C in the capital resources table under (1) and GENPRU 2.2; and

(b)

capital instruments included at stage B of the calculation in the capital resources table as at 30 December 2010 and treated under GENPRU TP8A.2R;

(6)

if it includes hybrid capital at stage B2 of the calculation in the capital resources table under GENPRU 2.2, except as provided by GENPRU TP8A.4R, must include capital instruments treated under GENPRU TP8A.2R in the calculation of the limit in GENPRU 2.2.30AR (2);

(7)

must not include hybrid capital at stage B1 of the calculation in the capital resources table under GENPRU 2.2, except as provided by GENPRU TP8A.5R, if and to the extent that the aggregate of the following exceeds the limit in GENPRU 2.2.30AR (1):

(a)

capital instruments included at stage C in the capital resources table under (1) andGENPRU 2.2; and

(b)

capital instruments included at stage B of the calculation in the capital resources table as at 30 December 2010 and treated under GENPRU TP8A.2R; and

(8)

if it includes hybrid capital at stage B1 of the calculation in the capital resources table under GENPRU 2.2, except as provided by GENPRU TP8A.5R, must include capital instruments treated underGENPRU TP8A.2R in the calculation of the limit in GENPRU 2.2.30AR (1).

8A.4

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A BIPRU firm may include hybrid capital at stage B2 of the calculation in the capital resources table, notwithstanding GENPRU TP8A.3R(5), if the firm issued it after 30 December 2010 and:

(1)

the capital instrument would otherwise be eligible for inclusion as hybrid capital at stage B2 of the calculation in the capital resources table under GENPRU 2.2; and

(2)

the firm issued it in order to replace another capital instrument that the firm treated as hybrid capital under GENPRU TP8A.2R.

8A.5

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A BIPRU firm may include hybrid capital at stage B1 of the calculation in the capital resources table, notwithstanding GENPRU TP8A.3R(7), if the firm issued it after 30 December 2010 and:

(1)

the capital instrument would otherwise be eligible for inclusion as hybrid capital at stage B1 of the calculation in the capital resources table under GENPRU 2.2; and

(2)

the firm issued it in order to replace another capital instrument that the firm treated as hybrid capital under GENPRU TP8A.2R.

8A.6

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In relation to the tier one capital resources of a BIPRU firm, calculated at stage F of the calculation in the capital resources table (Total tier one capital after deductions):

(1)

from 31 December 2020 until 30 December 2030:

(a)

no more than 20% may be accounted for by items treated under GENPRU TP8A.2R as tier one capital; and

(b)

in the case of a building society, any PIBS with an incentive to redeem treated under GENPRU TP8A.2R is to be treated as hybrid capital included at stage C of the calculation in the capital resources table and as subject to the limit in GENPRU 2.2.30AR (3); and

(2)

from 31 December 2030 until 30 December 2040, no more than 10% may be accounted for by items treated under GENPRU TP8A.2R as tier one capital.

8A.7

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BIPRU firms which do not comply by 31 December 2010 with the limits set out in GENPRU 2.2.29 R to GENPRU 2.2.30AR (3) must develop strategies and processes on the necessary measures to resolve this situation before the dates set out in GENPRU TP8A.6R.