Related provisions for MCOB 5.1.6
Overseas firm (other than an incoming EEA firm) |
|||
TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies insofar as an activity is carried on from an establishment maintained by the firm (or its appointed representative or, where applicable, its tied agent) in, and within the territory of, another EEA State |
TC does not apply |
TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom |
|
TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies in respect of employees who engage in or oversee activities from a branch established in another EEA state |
TC does not apply |
TC does not apply |
|
TC applies if the customer is resident in the United Kingdom at the time the regulated mortgage activity or reversion activity is carried on and TC also applies if the customer is resident in another EEA State (at the time that the activity is carried on) but only if the activity is carried on from an establishment maintained by the firm or its appointed representative in the United Kingdom |
Same as for UK domestic firm |
Same as for UK domestic firm |
|
Any other activity in Appendix 1 |
TC applies in respect of employees who carry on these activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies in respect of employees who carry on activities with or for a client in the United Kingdom |
TC applies in respect of its employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom |
TC applies in respect of its employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom |
Table: Items which are eligible to contribute to the capital resources of a firm
Item |
Additional explanation |
|||
1. |
Share capital |
This must be fully paid and may include: |
||
(1) |
ordinary share capital; or |
|||
(2) |
preference share capital (excluding preference shares redeemable by shareholders within two years). |
|||
2. |
Capital other than share capital (for example, the capital of a sole trader, partnership or limited liability partnership) |
The capital of a sole trader is the net balance on the firm's capital account and current account. The capital of a partnership is the capital made up of the partners': |
||
(1) |
capital account, that is the account: |
|||
(a) |
into which capital contributed by the partners is paid; and |
|||
(b) |
from which, under the terms of the partnership agreement, an amount representing capital may be withdrawn by a partner only if: |
|||
(i) he ceases to be a partner and an equal amount is transferred to another such account by his former partners or any person replacing him as their partner; or |
||||
(ii) the partnership is otherwise dissolved or wound up; and |
||||
(2) |
current accounts according to the most recent financial statement. |
|||
For the purpose of the calculation of capital resources, in respect of a defined benefit occupational pension scheme: |
||||
(1) |
a firm must derecognise any defined benefit asset; |
|||
(2) |
a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year. |
|||
3. |
Reserves (Note 1) |
These are, subject to Note 1, the audited accumulated profits retained by the firm (after deduction of tax, dividends and proprietors' or partners' drawings) and other reserves created by appropriations of share premiums and similar realised appropriations. Reserves also include gifts of capital, for example, from a parent undertaking. |
||
For the purposes of calculating capital resources, a firm must make the following adjustments to its reserves, where appropriate: |
||||
(1) |
a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on debt instruments held, or formerly held,3 in the available-for-sale financial assets category; |
|||
(2) |
a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on cash flow hedges of financial instruments measured at cost or amortised cost; |
|||
(3) |
in respect of a defined benefit occupational pension scheme: |
|||
(a) |
a firm must derecognise any defined benefit asset; |
|||
(b) |
a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year. |
|||
4. |
Interim net profits (Note 1) |
If a firm seeks to include interim net profits in the calculation of its capital resources, the profits have, subject to Note 1, to be verified by the firm's external auditor, net of tax, anticipated dividends or proprietors' drawings and other appropriations. |
||
5. |
Revaluation reserves |
|||
6. |
General/ collective provisions (Note 1) |
These are provisions that a firm carrying on home financing1or home finance administration1holds against potential losses that have not yet been identified but which experience indicates are present in the firm's portfolio of assets. Such provisions must be freely available to meet these unidentified losses wherever they arise. Subject to Note 1, general/collective provisions must be verified by external auditors and disclosed in the firm's annual report and accounts. 1111 |
||
7. |
Subordinated loans |
Subordinated loans must be included in capital on the basis of the provisions in this chapter that apply to subordinated loans. |
||
Note: |
||||
1 |
Reserves must be audited and interim net profits, general and collective provisions must be verified by the firm's external auditor unless the firm is exempt from the provisions of Part VII of the Companies Act 1985 (section 249A (Exemptions from audit)) or, where applicable, Part 16 of the Companies Act 2006 (section 477 (Small companies: Conditions for exemption from audit))2 relating to the audit of accounts. 2 |
- (1)
This rule applies to a firm which:
- (a)
carries on:
- (i)
- (ii)
home finance mediation activity1(or both); and
1
in relation to those activities, holds client money or other client assets; or5
- (b)
carries on home financing or home finance administration connected to regulated mortgage contracts (or both) unless as at 26 April 2014 its Part IV permission was and continues to remain subject to a restriction preventing it from undertaking new home financing or home finance administration connected to regulated mortgage contracts.5
5
- (a)
- (2)
In calculating its capital resources, the firm must exclude any amount by which the aggregate amount of its subordinated loans and its redeemable preference shares exceeds the amount calculated as follows:
four times (a - b - c); |
||
where: |
||
a |
= |
items 1 to 5 in the Table of items which are eligible to contribute to a firm's capital resources (see MIPRU 4.4.2 R) |
b |
= |
|
c |
= |
the amount of its intangible assets (but not goodwill until 14 January 2008 - see transitional provision 1). |