Related provisions for SUP App 3.6.1
Schedule to the Recognition Requirements Regulations, paragraph 3
2(1) |
The [UK RIE] must ensure that the systems and controls used in the performance of its [relevant functions] are adequate, and appropriate for the scale and nature of its business. |
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(2) |
Sub-paragraph (1) applies in particular to systems and controls concerning - |
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(a) |
the transmission of information; |
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(b) |
the assessment, mitigation and management of risks to the performance of the [UK RIE'srelevant functions]; |
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(c) |
the effecting and monitoring of transactions on the [UK RIE]; |
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(ca) |
the technical operation of the [UK RIE], including contingency arrangements for disruption to its facilities; |
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(d) |
the operation of the arrangements mentioned in paragraph 4(2)(d); and |
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(e) |
(where relevant) the safeguarding and administration of assets belonging to users of the [UK RIE's] facilities. |
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Table : Simplified method of calculating risk weights
This table belongs to BIPRU 3.5.4 G.
Exposure class |
Exposure sub-class |
Risk weights |
Comments |
Central government |
Exposures to United Kingdom government or Bank of England in sterling |
0% |
|
Exposures to United Kingdom government or Bank of England in the currency of another EEA State |
0% |
See Note 2. |
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Exposures to EEA State's central government or central bank in currency of that state |
0% |
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Exposures to EEA State's central government or central bank in the currency of another EEA State |
0% |
See Notes 2 and 3. |
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Exposures to central governments or central banks of certain countries outside the EEA in currency of that country |
See next column |
The risk weight is whatever it is under local law. See BIPRU 3.4.6 R for precise details. |
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Exposures to European Central Bank |
0% |
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Other exposures |
100% |
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Regional/local governments |
Exposures to the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly in sterling |
0% |
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Exposures to the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly in the currency of another EEA State |
0% |
See Note 2. |
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Exposures to EEA States' equivalent regional/local governments in currency of that state |
0% |
See BIPRU 3.4.17 R for details of type of local/regional government covered. |
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Exposures to EEA States' equivalent regional/local governments in the currency of another EEA State |
0% |
See BIPRU 3.4.17 R for details of type of local/regional government covered. See Notes 2 and 3. |
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Exposures to local or regional governments of certain countries outside the EEA in currency of that country |
0% |
See BIPRU 3.4.19 R for details of type of local/regional government covered. See Note 1. |
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Exposures to United Kingdom or EEA States' local/regional government in currency of that state if the exposure has original effective maturity of 3 months or less |
20% |
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Exposures to United Kingdom or EEA States' local/regional government in the currency of another EEA State if the exposure has original effective maturity of 3 months or less |
20% |
See Note 2. See Note 3 for local/regional government of an EEA State other than the United Kingdom |
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Exposures to local or regional governments of countries outside the EEA in currency of that country if the exposure has original effective maturity of 3 months or less |
20% |
See Note 1. |
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Other exposures |
100% |
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Exposures to a PSE of the United Kingdom or of an EEA State if that PSE is guaranteed by its central government and if the exposure is be in currency of that PSE's state. |
0% |
BIPRU 3.4.24 R describes the United KingdomPSEs covered and BIPRU 3.4.25 R describes the EEAPSEs covered. |
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Exposures to PSE of a country outside the EEA if that PSE is guaranteed by the country's central government and if the exposure is in currency of that country. |
0% |
See BIPRU 3.4.26 R and Note 1. |
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Exposures to a PSE of the United Kingdom or of an EEA State in currency of that state if the exposure has original effective maturity of 3 months or less |
20% |
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Exposures to a PSEof the United Kingdom or of an EEA State in the currency of another EEA State if the exposure has original effective maturity of 3 months or less |
20% |
See Notes 2 and 3. |
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Exposures to PSE of a country outside the EEA in currency of that country if the exposure has original effective maturity of 3 months or less |
20% |
See Note 1. |
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Other exposures |
100% |
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Exposures to multilateral development banks listed in paragraph (1) of the Glossary definition |
0% |
Simplified approach does not apply. Normal rules apply. |
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Other exposures |
Various |
Treated as an institution |
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EU2, the International Monetary Fund and the Bank for International Settlements 2 |
0% |
Simplified approach does not apply. Normal rules apply. |
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Exposures to United Kingdominstitution in sterling with original effective maturity of three months or less |
20% |
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Exposures to United Kingdominstitution in the currency of another EEA State with original effective maturity of three months or less |
20% |
See Note 2. |
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Exposures to institution whose head office is in another EEA State in the currency of that state with original effective maturity of three months or less |
20% |
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Exposures to institution whose head office is in another EEA State in the currency of another EEA State with original effective maturity of three months or less |
20% |
See Notes 2 and 3. |
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Exposures to institution with a head office in a country outside the EEA in the currency of that country with original effective maturity of three months or less |
20% |
See Note 1. |
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Exposures to United Kingdominstitution in sterling with original effective maturity of over three months |
50% |
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Exposures to United Kingdominstitution in the currency of another EEA State with original effective maturity of over three months |
50% |
See Note 2. |
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Exposures to an EEAinstitution with a head office in another EEA State in the currency of that state with original effective maturity of over three 1months |
50% |
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Exposures to an EEAinstitution with a head office in another EEA State in the currency of another EEA State with original effective maturity of over three1 months |
50% |
See Notes 2 and 3. |
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Exposures to institution with a head office in a country outside the EEA in the currency of that country with original effective maturity of over three1 months |
50% |
See Note 1. |
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Other exposures |
100% |
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100% |
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75% |
Simplified approach does not apply. Normal rules apply. |
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Mortgages on residential or commercial property |
Various |
Simplified approach does not apply. Normal rules apply. |
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Past due items |
Various |
Simplified approach does not apply. Normal rules apply. |
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High risk items |
150% |
Simplified approach does not apply. Normal rules apply. |
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Various |
Risk weights are based on the risk weight of issuer as described in BIPRU 3.4.110 R. The risk weight of the issuer for this purpose should be calculated under the simplified approach. |
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Generally 1250%. May look through to underlying exposures if BIPRU 9 allows. |
Use the BIPRU 9rules for unrated exposures under the standardised approach |
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Short term exposures with rating |
See BIPRU 3.4.112 R. Not applicable as uses ECAI ratings. |
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May look through to underlying under BIPRU 3.4.123 R |
Various |
Simplified approach does not apply. Normal rules apply. May use simplified approach to underlying if simplified approach applies to underlying. |
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May use average risk weight under BIPRU 3.4.124 R |
Various |
Simplified approach does not apply. Normal rules apply. May use simplified approach to underlyings if simplified approach applies to underlying. |
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High risk under BIPRU 3.4.118 R |
150% |
Simplified approach does not apply. Normal rules apply. |
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Others |
100% |
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Other items under BIPRU 3.2.9 R (16) |
Various |
Simplified approach does not apply. Normal rules apply. |
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Note 1: The risk weight should not be lower than the risk weight that applies for national currency exposures of the central government of the third country in question under BIPRU 3.5. That means that this risk weight only applies if the third country is one of those to which BIPRU 3.4.6 R (Preferential risk weight for exposures of the central government of countries outside the EEA that apply equivalent prudential standards) applies. |
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Note 2: This is a transitional measure. It lasts until 31 December 2012. |
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Note 3: The risk weight should not be lower than the risk weight that applies for exposures of the central government of the EEA State in question in the currency of another EEA State under BIPRU 3.5. |
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1Note: The following definitions relevant to the prospectus rules are extracted from the Glossary.
Act |
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admission to trading |
admission to trading on a regulated market. |
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advertisement |
(as defined in the PD Regulation) announcements: |
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(1) |
relating to a specific offer to the public of securities or to an admission to trading on a regulated market; and |
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(2) |
aiming to specifically promote the potential subscription or acquisition of securities. |
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annual information update |
the document referred to in PR 5.2.1 R. |
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applicant |
an applicant for approval of a prospectus or supplementary prospectus relating to transferable securities. |
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asset backed security |
(as defined in the PD Regulation) securities which: |
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(1) |
represent an interest in assets, including any rights intended to assure servicing, or the receipt or timeliness of receipts by holders of assets of amounts payable thereunder; or |
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(2) |
are secured by assets and the terms of which provide for payments which relate to payments or reasonable projections of payments calculated by reference to identified or identifiable assets. |
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base prospectus |
a base prospectus referred to in PR 2.2.7 R. |
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body corporate |
(in accordance with section 417(1) of the Act (Definitions) any body corporate, including a body corporate constituted under the law of a country or territory outside the United Kingdom; |
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building block |
(as defined in the PD Regulation) a list of additional information requirements, not included in one of the schedules, to be added to one or more schedules, as the case may be, depending on the type of instrument and/or transaction for which a prospectus or base prospectus is drawn up. |
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CARD |
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CESR recommendations |
the recommendations for the consistent implementation of the European Commission's Regulation on Prospectuses no 809/2004 published by the Committee of European Securities Regulators. |
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collective investment undertaking other than the closed-end type |
(in PR) (as defined in Article 2.1(o) of the prospectus directive) unit trusts and investment companies: |
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(1) |
the object of which is the collective investment of capital provided by the public, and which operate on the principle of risk-spreading; |
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(2) |
the units of which are, at the holder's request, repurchased or redeemed, directly or indirectly, out of the assets of these undertakings. |
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Consolidated Admissions and Reporting Directive |
Directive 2001/34/EC of the European Parliament and of the Council on the admission of securities to official stock exchange listing and on information to be published on those securities. |
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credit institution |
as defined in article 1(1) of the Banking Consolidation Directive. |
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director |
(in accordance with section 417(1)(a) of the Act) a person occupying in relation to it the position of a director (by whatever name called) and, in relation to an issuer which is not a body corporate, a person with corresponding powers and duties. |
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EEA State |
(in accordance with paragraph 8 of Schedule 3 to the Act (EEA Passport Rights)) a State which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2 May 1992, as it has effect for the time being; as at 1 May 2004, the following are the EEA States: Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom. |
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equity security |
(as defined in Article 2.1(b) of the prospectus directive) shares and other transferable securities equivalent to shares in companies, as well as any other type of transferable securities giving the right to acquire any of the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said issuer. |
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equity share |
shares comprised in a company'sequity share capital. |
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equity share capital |
(for a company), its issued share capital excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution. |
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executive procedures |
the procedures relating to the giving of warning notices, decision notices and supervisory notices that are described in DEPP 4 (Decision by FSA staff under executive procedures)2. 22 |
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FSA |
the Financial Services Authority. |
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guarantee |
(as defined in the PD Regulation) any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of guarantee, surety, keep well agreement, mono-line insurance policy or other equivalent commitment. |
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guarantor |
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Home State or Home Member State |
(as defined in section 102C of the Act) in relation to an issuer of transferable securities, the EEA State which is the "home Member State" for the purposes of the prospectus directive (which is to be determined in accordance with Article 2.1(m) of that directive). |
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Host State or Host Member State |
(as defined in Article 2.1(n) of the prospectus directive) the EEA State where an offer to the public is made or admission to trading is sought, when different from the home State. |
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| 3 | [deleted]3 3 |
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| 3 | [deleted]3 3 |
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issuer |
(as defined in section 102A of the Act) a legal person who issues or proposes to issue the transferable securities in question. |
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The European Parliament and Council Directive on markets in financial instruments (No. 2004/39/EC). See also MiFID Regulation and MiFID implementing Directive.3 |
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non-equity transferable securities |
(as defined in section 102A of the Act) all transferable securities that are not equity securities. |
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Note: In the prospectus directive and the PD Regulation, the Commission uses the term "non-equity securities" rather than "non-equity transferable securities". |
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offer |
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offer of transferable securities to the public |
(as defined in section 102B of the Act), in summary: |
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(a) |
a communication to any person which presents sufficient information on:
to enable an investor to decide to buy or subscribe for the securities in question; |
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(b) |
which is made in any form or by any means; |
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(c) |
including the placing of securities through a financial intermediary; |
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(d) |
but not including a communication in connection with trading on:
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Note: This is only a summary, to see the full text of the definition, readers should consult section 102B of the Act. |
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offering programme |
(as defined in Article 2.1(k) of the prospectus directive) a plan which would permit the issuance of non-equity securities, including warrants in any form, having a similar type and/or class, in a continuous or repeated manner during a specified issuing period. |
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offeror |
a person who makes an offer of transferable securities to the public. |
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overseas company |
a company incorporated outside the United Kingdom. |
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Part 6 rules |
(in accordance with section 73A(1) of the Act), rules made for the purposes of Part 6 of the Act. |
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PD |
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PD Regulation |
Regulation number 809/2004 of the European Commission. |
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person |
(in accordance with the Interpretation Act 1978) any person, including a body of persons corporate or unincorporated that is, a natural person, a legal person and, for example, a partnership). |
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PR |
the Prospectus Rules sourcebook. |
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profit estimate |
(as defined in the PD Regulation) a profit forecast for a financial period which has expired and for which results have not yet been published. |
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profit forecast |
(as defined in the PD Regulation) a form of words which expressly states or by implication indicates a figure or a minimum or maximum figure for the likely level of profits or losses for the current financial period and/or financial periods subsequent to that period, or contains data from which a calculation of such a figure for future profits or losses may be made, even if no particular figure is mentioned and the word "profit" is not used. |
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property collective investment undertaking |
(as defined in the PD Regulation) a collective investment undertaking whose investment objective is the participation in the holding of property in the long term. |
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prospectus |
a prospectus required under the prospectus directive. |
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prospectus directive |
the Directive of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (No 2003/71/EC). |
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Prospectus Rules |
(as defined in section 73A(4) of the Act) rules expressed to relate to transferable securities. |
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Public international body |
(as defined in the PD Regulation) a legal entity of public nature established by an international treaty between sovereign States and of which one or more Member States are members. |
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qualified investor |
(as defined in section 86(7) of the Act) : |
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(a) |
any entity falling within the meaning of Article 2(1)(e)(i), (ii) or (iii) of the prospectus directive; |
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(b) |
An investor registered on the register maintained by the competent authority under section 87R; |
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(c) |
An investor authorised by an EEA State other than the United Kingdom to be considered as a qualified investor for the purposes of the prospectus directive. |
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register |
register of qualified investors maintained by the FSA under section 87R of the Act. |
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registration document |
a registration document referred to in PR 2.2.2 R. |
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regulated information |
(as defined in the PD Regulation) all information which the issuer, or any person who has applied for the admission of securities to trading on a regulated market without the issuer’s consent, is required to disclose under Directive 2001/34/EC or under Article 6 of Directive 2003/6/EC.3 |
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regulated market |
a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments in the system and in accordance with its non-discretionary rules in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the provisions of Title III of MiFID.3 |
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RIS |
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risk factors |
(as defined in the PD Regulation) a list of risks which are specific to the situation of the issuer and/or the securities and which are material for taking investment decisions. |
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rule |
(in accordance with section 417(1) of the Act (Definitions)) a rule made by the FSA under the Act. |
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schedule |
(as defined in the PD Regulation) a list of minimum information requirements adapted to the particular nature of the different types of issuers and/or the different securities involved. |
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securities issued in a continuous and repeated manner |
(as defined in Article 2.1(l) of the prospectus directive) issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months. |
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securities note |
a securities note referred to in PR 2.2.2 R. |
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small and medium-sized enterprise |
(as defined in Article 2.1(f) of the prospectus directive) companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: an average number of employees during the financial year of less than 250, a total balance sheet not exceeding €43,000,000 and an annual net turnover not exceeding €50,000,000. |
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special purpose vehicle |
(as defined in the PD Regulation) an issuer whose objects and purposes are primarily the issue of securities. |
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statutory notice associated decision |
a decision which is made by the FSA and which is associated with a decision to give a statutory notice, including a decision: |
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statutory notice decision |
a decision by the FSA on whether or not to give a statutory notice. |
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(a) |
to determine or extend the period for making representations; |
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(b) |
to determine whether a copy of the statutory notice needs to be given to any third party and the period for him to make representations; |
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(c) |
to refuse access to FSA material; |
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(d) |
as to the information which it is appropriate to publish about the matter to which a final notice or an effective supervisory notice relates. |
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summary |
(in relation to a prospectus) the summary included in the prospectus. |
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supplementary prospectus |
a supplementary prospectus containing details of a new factor, mistake or inaccuracy. |
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transferable security |
(as defined in section 102A of the Act) anything which is a transferable security for the purposes of MiFID3, other than money-market instruments for the purposes of that directive which have a maturity of less than 12 months. 3 |
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Note: In the prospectus directive and PD regulation, the Commission uses the term "security" rather than "transferable security". |
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umbrella collective investment scheme |
(as defined in the PD Regulation) a collective investment undertaking invested in one or more collective investment undertakings, the asset of which is composed of separate class(es) or designation(s) of securities. |
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United Kingdom |
England and Wales, Scotland and Northern Ireland (but not the Channel Islands or the Isle of Man). |
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units of a collective investment scheme |
(as defined in Article 2.1(p) of the prospectus directive) securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets. |
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working day |
(as defined in section 103 of the Act) any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom. |
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