Related provisions for MCOB 9.4.121
41 - 60 of 251 items.
(1) In this section "default sum" means in relation to the borrower under a P2P agreement, a sum (other than a sum of interest) which is payable by the borrower under the agreement in connection with a breach of the agreement by the borrower.(2) But a sum is not a default sum in relation to the borrower simply because as a consequence of the breach of the agreement the borrower is required to pay the sum earlier than would otherwise have been the case.
The notice required by CONC 7.19.4 R must contain:(1) a form of wording to the effect that it relates to default sums and is given in compliance with FCArules;(2) the date of the notice;(3) a description of the agreement sufficient to identify it;(4) the firm's name, telephone number, postal address and, where appropriate, any other address;(5) the amount and nature of each default sum payable under the agreement which has not been the subject of a previous notice of default sums;(6)
A firm must not pay or accept any fee or commission, or provide or receive any non-monetary benefit, in relation to designated investment business or, in the case of its MiFID or equivalent third country business, another ancillary service, carried on for a client other than:(1) a fee, commission or non-monetary benefit paid or provided to or by the client or a person on behalf of the client; or(2) a fee, commission or non-monetary benefit paid or provided to or by a third party
A firm will satisfy the disclosure obligation under this section if it:(1) discloses the essential arrangements relating to the fee, commission or non-monetary benefit in summary form;(2) undertakes to the client that further details will be disclosed on request; and(3) honours the undertaking in (2).[Note: article 26 of the MiFID implementing Directive and article 29(2) of the UCITS implementing Directive]7
(1) 1If a firm is required to disclose commission (see COBS 6.4) to a client in relation to the sale of a packaged product (other than in relation to arrangements between firms that are in the same immediate group) the firm should not enter into any of the following:(a) volume overrides, if commission paid in respect of several transactions is more than a simple multiple of the commission payable in respect of one transaction of the same kind; and(b) an agreement to indemnify
(1) 1If a firm enters into an arrangement with another firm under which it makes or receives a payment of commission in relation to the sale of a packaged product that is increased in excess of the amount disclosed to the client, the firm is likely to have breached the rules on disclosure of charges, remuneration and commission (see COBS 6.4) and, where applicable, the rule on inducements in COBS 2.3.1R (2)(b), unless the increase is attributable to an increase in the premiums
1In interpreting the table of reasonable non-monetary benefits, retail investment product providers5 should be aware that where a benefit is made available to one firm and not another, this is more likely to impair compliance with the client's best interests rule and that, where any benefits of substantial size or value (such as adviser training programmes or significant software) are made available to firms that are subject to the rules on adviser charging and remuneration (COBS
(1) Where a financial promotion concerns a facility for which security is or may be required, the promotion must:(a) state that security is or may be required; and(b) specify the nature of the security.[Note: regulation 7(1) of CCAR 2004](2) Where, in the case of a financial promotion, the security comprises or may comprise a mortgage or charge on a property used by the customer as a dwelling (whether or not the customer’s primary residence)4:(a) except where (c) applies, the
(1) A financial promotion must specify the typical APR if the promotion:(a) specifies any other rate of charge;(b) includes any of the items of information listed in CONC 3.6.10R (5) to (7);(c) indicates in any way, whether expressly or by implication,3 including by means of the name given to a business or of an address used by a business for the purposes of electronic communication, that:(i) credit is available to persons who might otherwise consider their access to credit restricted;
(1) A financial promotion must not include:(a) the word “overdraft” or any similar expression as describing any agreement for running-account credit, except where the agreement enables a customer to overdraw on a current account; (b) the expression “interest free” or any similar expression indicating that a customer is liable to pay no greater amount in respect of a transaction financed by credit than he would be liable to pay as a cash purchaser for the like transaction, except
(1) In the case of a financial promotion about running-account credit, the following assumptions have effect for the purpose of calculating the total charge for credit and any APR, notwithstanding the terms of the transaction advertised and in place of any assumptions in CONC App 1.1.11 R to CONC App 1.1.18 R that might otherwise apply:(a) the amount of the credit to be provided must be taken to be £1,500 or, in a case where credit is to be provided subject to a credit limit
(1) The amount of credit which may be provided under a credit agreement or an indication of one or both of the maximum amount and the minimum amount of credit which may be provided. [Note: paragraph 1 of schedule 2 to CCAR 2004]Deposit of money in an account(2) A statement of any requirement to place on deposit any sum of money in any account with any person. [Note: paragraph 2 of schedule 2 to CCAR 2004]Cash price(3) In the case of a financial promotion about credit to be provided
The illustration provided as part of the offer document in accordance with MCOB 6.4.1 R (1) must meet the requirements of MCOB 5.6 (Content of illustrations) with the following modifications:(1) the illustration must be suitably adapted and revised to reflect the fact that the firm is making an offer to a customer and updated to reflect changes to, for example, the interest rate, charges, the exchange rate or the APR required by MCOB 10 (Annual Percentage Rate), at the date the
In complying with MCOB 6.4.11 R (6) the firm is not required to repeat in this section of the offer document the cash amounts of the early repayment charges set out in the illustration provided as part of the offer document. The firm may instead insert a reference to the relevant section of that illustration.
If the firm knows at the point that the offer is made to the customer that its interest in the regulated mortgage contract will be assigned (by sale or transfer) and the firm will no longer be responsible for setting interest rates and charges, the offer document must:(1) state this; and(2) state, where known, who will be responsible for setting interest rates and charges after the sale or transfer.
For a firm which carries on insurance mediation activity or home finance mediation activity1, annual income is the amount of all brokerage, fees, commissions and other related income (for example, administration charges, overriders, profit shares) due to the firm in respect of or in relation to those activities. But it does not include income generated from carrying on any home finance mediation activity for:31(1) second charge regulated mortgage contracts; or3(2) legacy CCA mortgage
(1) The purpose of the rule on annual income that applies to insurance intermediaries and mortgage intermediaries is to ensure that the capital resources requirement is calculated on the basis only of brokerage and other amounts earned by a firm which are its own income.(2) Annual income includes commissions and other amounts the firm may have agreed to pay to other persons involved in a transaction, such as sub-agents or other intermediaries.(3) A firm'sannual income does not,
For the purposes of the calculation of the capital resources of a firm carrying on home finance administration1only with all the assets it administers off balance sheet, annual income is the sum of:11(1) revenue (that is, commissions, fees, net interest income, dividends, royalties and rent); and(2) gains;(3) arising in the course of the ordinary activities of the firm, less profit:(a) on the sale or termination of an operation;(b) arising from a fundamental reorganisation or
For the purposes of delivering best execution for a retail client where there is more than one competing venue to execute an order for a financial instrument, in order to assess and compare the results for the client that would be achieved by executing the order on each of the execution venues listed in the firm's order execution policy that is capable of executing that order, the firm's own commissions and costs for executing the order on each of the eligible execution venues
The obligation to deliver best execution for a retail client where there are competing execution venues is not intended to require a firm to compare the results that would be achieved for its client on the basis of its own execution policy and its own commissions and fees, with results that might be achieved for the same client by any other firm on the basis of a different execution policy or a different structure of commissions or fees. Nor is it intended to require a firm to
A firm would be considered to structure or charge its commissions in a way which discriminates unfairly between execution venues if it charges a different commission or spread to clients for execution on different execution venues and that difference does not reflect actual differences in the cost to the firm of executing on those venues. [Note: recital 73 to the MiFID implementing Directive]
The provisions of this section which provide that costs of execution include a firm's own commissions or fees charged to the client for the provision of an investment service should not apply for the purpose of determining what execution venues must be included in the firm's execution policy. [Note: recital 72 to the MiFID implementing Directive]
For the purposes of this chapter, the total charge for credit which may be provided under an actual or prospective agreement is the total (determined as at the date of the making of the agreement) of the charges specified in MCOB 10.4.2 R which apply in relation to the agreement, but excluding the charges specified in MCOB 10.4.4 R.
The amounts of the following charges are included in the total charge for credit in relation to an agreement, with the exceptions in MCOB 10.4.4 R:(1) the total of the interest on the credit which may be provided under the agreement; (2) other charges at any time payable under the transaction by or on behalf of the customer, whether to the firm or any other person; and(3) a premium under a contract of insurance, payable under the transaction by the customer, where the making or
(1) MCOB 10.4.2 R means, for example, that the following charges must be included within the total charge for credit:(a) any fee payable to a mortgage intermediary for arranging the contract (see MCOB 10.4.2 R(2)); and(b) any higher lending charge.(2) The FCA takes the view that charges required to be included within the total charge for credit should not be excluded on the basis of these charges being refundable in certain circumstances. (3) The FCA also takes the view that the
(1) The amounts of the following items are not included in the total charge for credit in relation to an agreement:(a) any charge payable under the transaction to the firm upon failure by the customer to do or to refrain from doing anything which he is required to do or to refrain from doing;(b) any charge:(i) which is payable by the firm to any person upon failure by the customer to do or to refrain from doing anything which he is required under the transaction to do or to refrain
A lender should only offer to, or enter into with, a firm a commission agreement providing for differential commission rates or providing for payments based on the volume and profitability of business where such payments are justified based on the extra work of the firm involved in that business.[Note: paragraph 5.5 (box) of ILG]
A credit broker must disclose to a customer in good time before a credit agreement or a consumer hire agreement is entered into, the existence of any commission or fee or other remuneration payable to the credit broker by the lender or owner or a third party in relation to a credit agreement or a consumer hire agreement, where knowledge of the existence or amount of the commission could actually or potentially:(1) affect the impartiality of the credit broker in recommending a
At the request of the customer, a credit broker must disclose to the customer, in good time before a regulated credit agreement or a regulated consumer hire agreement is entered into, the amount (or if the precise amount is not known, the likely amount) of any commission or fee or other remuneration payable to the credit broker by the lender or owner or a third party.[Note: paragraph 3.7i (box) of CBG]
(1) In relation to debt collecting and debt administration, the definition of customer refers to an individual from whom the payment of a debt is sought; this would include where a firm mistakenly treats an individual as the borrower under an agreement and mistakenly or wrongly pursues the individual for a debt.[Note: paragraph 1.12 of DCG](2) In relation to debt collecting and debt administration, the definitions of customer and borrower are given extended meanings to include,
Where a customer under a regulated credit agreement fails to make an occasional payment when it becomes due, a firm should, in accordance with Principle 6, allow for such unmade payments to be made within the original term of the agreement unless:(1) the firm reasonably believes that it is appropriate to allow a longer period for repayment and has no reason to believe that doing so will increase the total amount payable to be unsustainable or otherwise cause a customer to be in
Examples of treating a customer with forbearance would include the firm doing one or more of the following, as may be relevant in the circumstances:(1) considering suspending, reducing, waiving or cancelling any further interest or charges (for example, when a customer provides evidence of financial difficulties and is unable to meet repayments as they fall due or is only able to make token repayments, where in either case the level of debt would continue to rise if interest and
An example of where a firm is likely to contravene Principle 6 and CONC 7.3.4 R is where the firm does not allow for alternative, affordable payment amounts to repay the debt due in full, where the customer is in default or arrears difficulties and the customer makes a reasonable proposal for repaying the debt or a debt counsellor or another person acting on the customer's behalf makes such a proposal.[Note: paragraphs 7.16 of ILG and 3.7j of DCG]
A firm must not pressurise a customer:(1) to pay a debt in one single or very few repayments or in unreasonably large amounts, when to do so would have an adverse impact on the customer's financial circumstances;[Note: paragraph 7.18 of ILG](2) to pay a debt within an unreasonably short period of time; or[Note: paragraphs 3.7i of DCG and 7.18 of ILG](3) to raise funds to repay the debt by selling their property, borrowing money or increasing existing borrowing.[Note: paragraph
(1) A variation or supplement of, or an exercise of a contractual power to vary or supplement, an agreement for high-cost short-term credit made before 2 January 2015 will be covered by this chapter if it has the result that a new charge, or an increase in an existing charge, is payable. (2) An example of where a charge results from a variation or supplement is where the duration of an agreement made before 2 January 2015 is extended and a further charge by way of interest or
Section 137C of the Act (FCA general rules: cost of credit and duration of credit agreements) as amended by the Financial Services (Banking Reform) Act 2013, places a duty on the FCA to make general rules with a view to securing an appropriate degree of protection for borrowers against excessive charges.
In accordance with that duty, the purpose of this chapter is:(1) to specify the descriptions of regulated credit agreement appearing to the FCA to involve the provision of high-cost short-term credit to which this chapter applies by using the definition of high-cost short-term credit set out in the Glossary;(2) to secure an appropriate degree of protection for borrowers against excessive charges; and (3) as a result, to restrict the charges for such high-cost short-term credi
Examples of the sorts of charge (which expression is defined in CONC 5A.6) applied in connection with the provision of credit covered by this chapter include, but are not limited to:(1) interest on the credit provided;(2) a charge related to late payment by, or default of, the borrower;(3) a charge related to the transmission of credit or for using a means of payment to or from the borrower;(4) a charge related to early repayment, or refinancing or changing the payment date or
Price information is likely also to include at least the total premium (or the basis for calculating it so that the customer can verify it) and, where relevant:(1) for policies of over one year with reviewable premiums, the period for which the quoted premium is valid, and the timing of reviews;(2) other fees, administrative charges and taxes payable by the customer through the firm; and(3) a statement identifying separately the possibility of any taxes not payable through the
(1) This rule applies when a premium will be paid using a credit agreement other than a revolving credit agreement. (2) A firm must provide price information in a way calculated to enable the customer to understand the additional repayments that relate to the purchase of the policy, and the total cost of the policy.(3) Price information must reflect any difference between the duration of the policy and that of the credit agreement.(4) A firm must explain to a customer, as applicable,
(1) Throughout the term of a policy, a firm must provide a customer with information about any change to:(a) the premium, unless the change conforms to a previously disclosed formula; and(b) any term of the policy, together with an explanation of any implications of the change where necessary.(2) This information must be provided in writing or another durable medium in good time before the change takes effect or, if the change is at the customer's request, as soon as is practicable
(1) When explaining the implications of a change, a firm should explain any changes to the benefits and significant or unusual exclusions arising from the change.(2) Firms will need to consider whether mid-term changes are compatible with the original policy, in particular whether it reserves the right to vary premiums, charges or other terms. Firms also need to ensure that any terms which reserve the right to make variations are not themselves unfair under the Unfair Terms Regulations
The effect of MCOB 5A.4.1R (1) and MCOB 5A.4.7 R is that a consumer will be deemed to be committed to an application if, for example, they pay a product-related fee (including a valuation fee) or provides electronic or verbal authority to process an application. It is not necessary for a consumer to provide an MCD mortgage lender with a completed application form to submit an application for an MCD regulated mortgage contract.
What constitutes “materially altered” or “different” requires consideration of the facts of each individual case. For example, a change of product such that the underlying terms and conditions of the MCD regulated mortgage contract have changed should normally be regarded as material or different, as would an additional charge, such as a higher lending charge, applying to the MCD regulated mortgage contract when it did not previously.
In meeting a request for an ESIS under MCOB 5A.4.1R (2)(b), the firm must not delay the provision of the ESIS by requesting information other than:(1) such information as is necessary to complete the ESIS in accordance with MCOB 5A.5.2 R and MCOB 5A.5.3 R, if the firm does not already know it;(2) where the firm acts in accordance with MCOB 5A.4.12R (2), such information as is necessary to ascertain whether or not the contract will be an MCD regulated mortgage contract;(3) where
(1) 1A firm must, as soon as a customer expresses an interest in becoming a SRB agreement seller, ensure that the 2disclosures and warnings set out in (1A) are 2made to the customer2, both orally and confirmed in writing, and he is given an adequate opportunity to consider them. The firm must not demand or accept any fees, charges or other sums from the customer, or undertake any action that commits the customer in any way to entering into a specific agreement, until:2222(a) 2the
2A firm may comply with the requirement in MCOB 5.9.1 R (Pre-sale disclosure) for disclosures and warnings to be confirmed in writing by providing the potential SRB agreement seller with the written pre-offer document that is required by MCOB 6.9.3 R (Written pre-offer document: Stage One) if this can be done as quickly as providing the pre-sale disclosures, provided that (in accordance with MCOB 5.9.1 R) the firm does not demand or accept any fees, charges or other sums from
2Examples of features of a regulated sale and rent agreement that a SRB agreement seller would reasonably need to know about (see MCOB 5.9.1R (1A)(m)) would include an arrangement under which the seller is to receive from the SRB agreement provider a refund of some agreed percentage of the discount (on the market value of the property) that was reflected in the sale price under the regulated sale and rent back agreement after the end of the agreed letting term. Should any restrictions
2What constitutes "materially altered" requires consideration of the facts of each individual case. For example, a change in the proposed purchase or valuation price of the property should normally be regarded as material, as would the introduction of an additional charge applying to the regulated sale and rent back agreement when it did not previously.
A mortgage intermediary must take reasonable steps to ensure that an illustration which it issues, or which is issued on its behalf, other than that provided by a mortgage lender:(1) is accurate within the following tolerances:(a) no more than one percent or £1, whichever is the greater, below the actual figures charged by the mortgage lender for the following:(i) the total amount payable in Section 15 of the illustration;(ii) the amounts that the customer must pay by regular
Given that the APR is presented as a percentage, and must be rounded to one decimal place in accordance with MCOB 10 (Annual Percentage Rate), firms should note that the tolerance allowed for the APR in MCOB 9.3.6 R(1)(b) means that, for example, where the actual APR is 5.0%, the quoted APR must be no lower than 4.9%, or where the actual APR is 16.0%, the quoted APR must be no lower than 15.9%.
An offer document may not always exactly match the illustration provided before application even when the equity release3 requirements have not changed. For example, where a fixed rate has a defined end date, the total amount payable may be different because the number of payments at the fixed rate has reduced, or the estimated amount of interest to be charged has changed, assuming a later date at which the lifetime mortgage3will start.33
The matters set out in (1) to (13)2 must be included in any authorised fund manager's report, except where otherwise indicated:2(1) the names and addresses of :(a) the authorised fund manager;(b) the depositary;(c) the registrar;(d) any investment adviser;(e) the auditor; and(f) for a scheme which invests in immovables, the standing independent valuer;(2) (for an ICVC), the names of any directors other than the ACD;(3) a statement of the authorised status of the scheme;(4) (for
The comparative information12 required by
COLL 4.5.7 R12
(Contents of the annual long report) and COLL 8.3.5A R (Contents of the annual report) must be shown for the last three annual accounting periods (or all of the authorised fund'sannual accounting periods, if fewer than three) and must set out:1212(1) [deleted]1212(1A) for a unit of each class in issue, a comparative table as at the end of the period to which the report relates, prepared in accordance with the requirements
(1) The figure for the "return before operating charges" shown in the comparative table required by COLL 4.5.10R (1A) should include all costs and charges actually borne by the class of units it describes.(2) The indication of actual costs and charges borne by a class of units should cover pro-rata allocations of the operating charges borne by the scheme (e.g. annual management fee, fees and expenses payable to the depositary, auditors and FCA, costs of buying and selling units
(1) The authorised fund manager must, within four months after the end of each annual accounting period and two months after the end of each half-yearly accounting period respectively, make available and publish the long reports2 prepared in accordance with COLL 4.5.7R (1) to (3)2 (Contents of the annual long report) and COLL 4.5.8R (1) to (2)2 (Contents of the half-yearly long report).22(2) The reports referred to in (1) must:(a) be supplied free of charge to any person on request2;2(b)
(1) 7The authorised fund manager of a feeder NURS must, where requested by an investor or the
FCA
, provide to such person copies of the annual and half-yearly long reports (or nearest equivalent documents for a qualifying master scheme that is a recognised scheme) of its qualifying master scheme free of charge.(2) Except where an investor requests paper copies or the use of electronic communications is not appropriate, the annual and half-yearly long reports (or nearest equivalent
1Article 72 exempts any financial promotion made by an employer to an employee in relation to a group personal pension scheme or a stakeholder pension scheme. This is subject to certain requirements as follows:(1) the financial promotion must inform the employee that the employer will make a contribution to the pension that the employee will receive from the pension scheme to which the financial promotion relates in the event of the employee becoming a member;(2) the employer
6Article 72A exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to a group personal pension scheme or a stakeholder pension scheme. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract
6Article 72C exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to work-related insurance. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract specifying the terms on which the communication
6Article 72D exempts any financial promotion made by an employer to an employee in relation to a staff mortgage. This is subject to certain requirements as follows:(1) where the provider of the staff mortgage is an undertaking in the same group as the employer, the employer must not receive or have received, any direct financial benefit (including any commission, discount, remuneration or reduction in premium) as a result of making the communication; and(2) where the communication
6Article 72E exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to a staff mortgage. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract specifying the terms on which the communication
1An advice centre is defined in article 73 as a body which:(1) gives advice which is free and in respect of which it does not receive any fee, commission or other reward;(2) provides debt advice as its principal financial services activity; and(3) in the case of a body which is not part of a local authority, holds adequate professional indemnity insurance or a guarantee providing comparable cover.This exemption should be of particular use to bodies such as Citizens Advice Bur
6A firm and its associates may:(1) solicit and accept a commission, remuneration or benefit of any kind in the circumstances set out in COBS 6.1A.4 R if:(a) the personal recommendation was made on or before 30 December 2012;(b) the solicitation and acceptance of the commission, remuneration or benefit of any kind was permitted by the rules in force on 30 December 2012;(c) the contract under which the right to receive the commission, remuneration or benefit of any kind was entered
(1) 8A firm may continue to accept a commission, remuneration or benefit of any kind after 30 December 2012 if there is a clear link between the payment and an investment in a retail investment product which was made by the retail client following a personal recommendation made, or a transaction executed, on or before 30 December 2012. This is the case even if the firm makes a personal recommendation to the same retail client after 30 December 2012 to the extent that the continued
11A firm and its associates may solicit and accept a commission, remuneration or benefit of any kind from a discretionary investment manager in the circumstances in COBS 6.1A.4 R if:(1) the firm or its associates recommended the discretionary investment manager to a retail client on or before 30 December 2012;(2) the solicitation and acceptance of the commission, remuneration or benefit of any kind was permitted by the rules in force on 30 December 2012;(3) the contract under
A firm is likely to be viewed as operating a charging structure that conceals the amount or purpose of its adviser charges if, for example:(1) it makes arrangements for amounts in excess of its adviser charges to be deducted from a retail client's investments from the outset, in order to be able to provide a cash refund to the retail client later; or(2) it provides other services to a retail client (for example, advising on a home finance transaction or advising on an equity release
A firm must
not hold money other than client money in a client
bank account unless it is:(1) a
minimum sum required to open the account, or to keep it open; or(2) money temporarily in the account in accordance
with CASS 5.5.16 R (Withdrawal of commission and mixed remittance); or(3) interest
credited to the account which exceeds the amount due to clients as
interest and has not yet been withdrawn by the firm.
(1) A firm may draw down commission from
the client bank account if:(a) it
has received the premium from
the client (or from a third party premium finance
provider on the client's behalf);2 and(b) this
is consistent with the firm'sterms of business which it maintains with
the relevant client and 2the insurance undertaking to
whom the premium will become2 payable;and the firm may
draw down commission before
payment of the premium to the insurance undertaking, provided that the
conditions
(1) As
soon as commission becomes due
to the firm (in accordance with CASS
5.5.16 R (1)) it must be treated as a remittance which must be withdrawn in
accordance with CASS
5.5.16 R (2). 2The procedure required by CASS 5.5.16 R will also 2apply where moneyis 2due and payable 2to the firm in
respect of fees due from clients (whether to the firm or
other professionals).(2) Firms are reminded that money received
in accordance with CASS
5.2 must not,
except where a firm and an insurance
The individual client balance
for each client must be calculated
as follows:(1) the
amount paid by a client to the firm (to include all premiums);
plus(2) the
amount due to the client (to
include all claims and premium refunds);
plus(3) the
amount of any interest or investment returns due to the client;(4) less
the amount paid to insurance undertakings for
the benefit of the client (to
include all premiums and commission due
to itself) (i.e. commissions that
are due but have not
A firm's client money (accruals)
requirement is the sum of the following:(1) all
insurance creditors shown in the firm's business
ledgers as amounts due to insurance undertakings, clients and other persons;
plus(2) unearned commission 2being the amount of commission 2shown as accrued (but not shown
as due 2and payable) as at the date of
the calculation (a prudent estimate must be used if the firm is
unable to produce an exact figure at the date of the calculation).