UPRU 2.1 Financial resources and financial resources requirements
Financial resources
1A firm must ensure that it has at all times financial resources which equal or exceed the applicable financial resources requirement.
Financial resources requirement
The financial resources requirement for a firm is the higher of:
- (1)
subject to a maximum requirement of €10,000,000:
- (a)
initial capital requirement of €125,000; plus
- (b)
if the funds under management exceed €250,000,000, an additional amount of 0.02% of the excess; or
- (a)
- (2)
the amount specified in article 97 of the EU CRR (Own funds based on fixed overheads) (as replicated in UPRU 2.1.2A EU).5
5
5Own Funds based on Fixed Overheads |
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1 |
In accordance with Articles 95 and 96, an investment firm and firms referred to in point (2)(c) of Article 4(1) that provide the investment services and activities listed in points (2) and (4) of Section A of Annex I to Directive 2004/39/EC shall hold eligible capital of at least one quarter of the fixed overheads of the preceding year. |
2 |
Where there is a change in the business of an investment firm since the preceding year that the competent authority considers to be material, the competent authority may adjust the requirement laid down in paragraph 1. |
3 |
Where an investment firm has not completed business for one year, starting from the day it starts up, an investment firm shall hold eligible capital of at least one quarter of the fixed overheads projected in its business plan, except where the competent authority requires the business plan to be adjusted. |
[Note Article 97(1) to (3) of the EU CRR] |
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5A firm's financial resources requirement will be recalculated annually when its fourth quarterly financial return3 is prepared. The firm should maintain financial resources sufficient to meet its new financial resources requirement from the date on which the fourth quarterly financial return3 is prepared (and no later than 80 business days after the accounting reference date).3 The expenditure based requirement 3 applicable at the accounting reference date will be based on the four quarterly financial returns prepared up to and on that date. 3
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