initial capital

1. (1) (in ELM) items coming into stage A of the calculation in ELM 2.4.2 R (Calculation of initial capital and own funds).27
2. (2) (for the purposes of the definition of matched principal dealer, in accordance with Article 2(24) of the Capital Adequacy Directive (Definitions) and with respect to a firm) capital that is recognised for the purpose of the rules about capital adequacy to which that firm is subject but excluding, in accordance with items (1) and (2) of Article 34(2) of the Banking Consolidation Directive (General principles), anything that does not fall within the following classes of capital:27
   1. (a) capital within the meaning of Article 22 of the Bank Accounts Directive (Liabilities: Item 9 - Subscribed capital), insofar as it has been paid up, plus share premium accounts but excluding cumulative preferential shares; or 27
   2. (b) reserves within the meaning of Article 23 of the Bank Accounts Directive (Liabilities: Item 11 - Reserves) and profits and losses brought forward as a result of the application of the final profit or loss. Interim profits can only be included before a formal decision has been taken only if these profits have been verified by persons responsible for the auditing of the accounts and if the amount thereof has been evaluated in accordance with the principles set out in the Bank Accounts Directive and is net of any foreseeable charge or dividend.27

In the case of a firm subject to the rules in chapter 10 of IPRU(INV), initial capital means initial capital as defined in the Glossary to that chapter.927