UPRU 1.2 Purpose

The purpose of this sourcebook is to amplify Principle 4 (Financial prudence) which requires a firm to maintain adequate financial resources to meet its designated investment business commitments and to withstand the risks to which its business is subject. This assists in the achievement of the statutory objectives4 of consumer protectionand protecting and enhancing the integrity of the UK financial system.4

This sourcebook also implements certain requirements of the UCITS Directive which among other matters imposes capital requirements on a UCITS management company.

The UCITS Directive incorporates references to provisions of the Banking Consolidation Directive and the Capital Adequacy Directive in relation to initial capital, own funds and fixed overheads. However, in line with article 163 of the CRD, the Banking Consolidation Directive and the Capital Adequacy Directive are repealed from 1 January 2014 and references to these directives are replaced with references to the CRD and the EU CRR in line with the correlation table set out in Annex II to the CRD and in Annex IV to the EU CRR.3