IPRU-INV 1 Application and General Provisions

The general scheme of this sourcebook is, wherever appropriate, to apply the financial and other prudential standards which applied to a firm immediately prior to it becoming authorised by the appropriate regulator under the Act. For convenience, the chapter numbers adopted in this sourcebook correspond with those of the rulebooks of previous regulators.

This sourcebook does not apply to banks, building societies, insurers, the Society of Lloyd's (except in relation to underwriting agents), friendly societies and certain other categories of firm and members' advisers.

On becoming authorised by the appropriate regulator a firm will have to comply with the particular chapter of this sourcebook appropriate to its business. The firm will be able to seek guidance on this during the authorisation procedure. If subsequently, the business for which a firm has permission changes it may be necessary for it to comply with a different set of financial resources requirements. Firms will be able to discuss this aspect with the appropriate regulator during the application process.

The result matched startSupervision manualresult matched end sets out provisions relating to the periodic reporting and notification of financial information to the appropriate regulator or to the auditing of accounts. However, this sourcebook contains a few additional notification requirements (notification rules).

The Glossary applies to the transitional provisions, this chapter (IPRU-INV 1), IPRU-INV 2, IPRU-INV 4, IPRU-INV 6, IPRU-INV 11 and IPRU-INV 13.

1. (1)

   IPRU-INV applies to:

   1. (a)

      a members' adviser;

   2. (b)

      an investment management firm;

   3. (c)

      a personal investment firm;

   4. (d)

      an authorised professional firm;

   5. (e)

      a securities and futures firm;

   6. (f)

      a service company;

   7. (g)

      the Society of Lloyd's (in relation to underwriting agents);

   8. (h)

      [deleted]

   9. (i)

      [deleted]

   10. (j)

       [deleted]

   11. (k)

       a collective portfolio management firm; and

   12. (l)

       a collective portfolio management investment firm.

2. (2)

   IPRU-INV does not apply to:

   1. (a)

      a lead regulated firm; or

   2. (b)

      a media firm; or

   3. (c)

      a MIFIDPRU investment firm (unless it is a collective portfolio management investment firm).

   4. (d)

      [deleted]

3. (3)

   The definitions in the Glossary (which is applicable to the Handbook generally) apply to this chapter.

A firm of a kind listed in the left-hand column of Table 1.2.4R must comply with the provisions of IPRU (INV) shown in the right hand column and, where relevant, the provisions of Chapter 14.

1. (1)

   If a firm was, immediately before commencement permitted to treat "relevant funds" as part of its capital resources under the financial resource rules of a previous regulator applicable to the firm, it may treat those funds in an equivalent manner under the corresponding provisions of IPRU-INV, provided that the conditions in (3) are met.

2. (2)

   For the purposes of this rule "relevant funds" are funds provided to the firm under the terms of

   1. (a)

      a subordinated loan agreement; or

   2. (b)

      qualifying undertaking; or

   3. (c)

      any other instrument treated in an equivalent manner under the financial resources rules applicable to the firm.

3. (3)

   The conditions referred to in (1) are either:

   1. (a)

      in the case of a subordinated loan agreement, qualifying undertaking or other relevant instrument to which the firm's previous regulator is not party:

      1. (i)

         the parties to it treat all rights (including, without limitation, rights to notice) which the agreement, undertaking or instrument grants to the firm's previous regulator as having been granted to the appropriate regulator; and

      2. (ii)

         if there is a variation of the commercial terms the parties include, in the terms of the instrument executed to effect the variation, provision to substitute reference to the appropriate regulator in place of any reference to the firm's previous regulator; or

   2. (b)

      in the case of a subordinated loan agreement, qualifying undertaking or other relevant instrument to which the firm's previous regulator is party, the parties treat the rights accorded to the self regulating organisation under the relevant instrument as having been assigned to the appropriate regulator immediately before commencement.