IPRU-INV 13.9 FINANCIAL TESTS FOR CATEGORY B FIRMS
A Category B firm must meet:
- (1)
financial Resources Test 1 (the Own funds Test) calculated in accordance with section 13.10;
- (2)
Financial Resources Test 1A (the Adjusted Net current assets Test) calculated in accordance with section 13.11, unless the firm is a low resource firm which is not permitted to carry on the activity of managing investments in respect of portfolios containing only life policies; and
- (3)
Financial Resources Test 2 (the Expenditure-based Test) calculated in accordance with section 13.12 unless the firm is a low resource firm.
Table 13B is a summary of the financial resources test for a Category B firm.
Table 13B This table forms part of rule 13.9.1
SUMMARY OF FINANCIAL RESOURCES FOR CATEGORY B FIRMS |
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Type of firm |
Financial Resources Test 1 Own funds Test |
Financial Resources Test 1A Adjusted Net current assets Test |
Financial Resources Test 2 Expenditure-based Test |
Rule/section References |
Category B1 (including any Network in this category) |
£10,000 |
Adjusted net current assets of £1 |
Liquid capital equal to the highest of 13/52 of relevant annual expenditure or £400 per adviser or £10.000 |
13.10 13.11 13.12.1C 13.12.2 to 13.12.5A 0 |
Category B2 which is permitted to carry on the activity of investment management in respect of portfolios containing only life policies or to delegate such activity to an investment firm |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the higher of 13/52 of relevant annual expenditure or £400 per adviser |
13.10 13.11 13.12.1D 13.12.2 to 13.12.5A |
Category B2 with 26+ advisers |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the higher of 8/52 of relevant annual expenditure or £400 per adviser |
13.10 13.11 13.12.1E 13.12.2 to 13.12.5A |
Category B2 with 1-25 advisers |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the higher of 4/52 of relevant annual expenditure or £400 per adviser |
13.10 13.11 13.12.1F 13.12.2 to 13.12.5A |
Category B3 which is permitted to carry on the activity of managing investments in respect of portfolios containing only life policies or to delegate such activity to an investment firm |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the higher of 8/52 of relevant annual expenditure or £400 per adviser |
13.10 13.11 13.12.1E 13.12.2 to 13.12.5A |
Category B3 with 26+ advisers |
£10,000 |
N/A |
N/A |
13.10 |
Network in Category B2 or B3 |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the higher of 13/52 of relevant annual expenditure or £400 per adviser |
13.10 13.11 13.12.1D 13.12.2 to 13.12.5A |
All Category B firms that do not hold client money or assets, but are permitted to establish, operate or wind up a personal pension scheme. |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the highest of 6/52 of relevant annual expenditure, £400 per adviser, £10,000 and any other expenditure-based requirement set out in 13.12.1 applicable to the firm. |
13.10 13.11 13.12.1 13.12.2 to 13.12.5A |
All Category B firms that hold client money or assets and are permitted to establish, operate or wind up a personal pension scheme. |
£10,000 |
Adjusted net current assets of £1 |
Adjusted capital equal to the highest of 13/52 of relevant annual expenditure, £400 per adviser, and £10,000 |
13.10 13.11 13.12.1G 13.12.2 to 13.12.5A |