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MIFIDPRU 5.8 Procedures to prevent investment firms from avoiding the K-CON own funds requirement

MIFIDPRU 5.8.1R

1A firm must not deliberately avoid the K-CON requirement by:

  1. (1)

    undertaking artificial transactions to close out an exposure and create a new exposure; or

  2. (2)

    temporarily transferring an exposure to another undertaking, whether within the same group or not.

MIFIDPRU 5.8.2R

1A firm must maintain systems which ensure that any closing out or transfer that is prohibited by MIFIDPRU 5.8.1R is immediately reported to the FCA in accordance with SUP 15.7 (Form and method of notification).