Related provisions for CONC 8.7.7
41 - 60 of 611 items.
A notification required from a firm under any notification rule must be given in writing, and in English, and must be submitted on the form specified for that notification rule, or if no form is specified, on the form inSUP 15 Ann 4 R3 (Notification form), and must give the firm's Firm Reference Number unless:237(1) the notification rule states otherwise; or(2) the notification is provided solely in compliance with Principle 11 (see SUP 15.3.7 G).
Unless stated in the notification rule, or on the relevant form (if specified), a written notification required from a firm under any notification rule must be:2(1) given to or addressed for the attention of the firm's usual supervisory contact at the FCA4 and77(2) delivered to the FCA4 by one of the methods in SUP 15.7.5AR6.777
If a notification rule requires notification within a specified period:(1) the firm must give the notification so as to be received by the FCA4 no later than the end of that period; and 77(2) if the end of that period falls on a day which is not a business day, the notification must be given so as to be received by the FCA4 no later than the first business day after the end of that period. 77
1The insurance client money chapter2 does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, which are insurance distribution activities8, if:2(1) the firm's designated professional body has made rules which implement article 10.68 of the IDD8;33(2) those rules have been approved by the FCA under section 332(5) of the Act; and(3) the firm is subject to the rules in the form in which they were approved.
(1) CASS applies directly in respect of activities conducted with or for all categories of clients.22(2) [deleted]52225(3) The insurance client money chapter2 does not generally distinguish between different categories of client. However, the term consumer4is used for those to 4whom additional obligations are owed, rather than the term retail client.2 This is to be consistent with the client categories used in 1the Insurance: New Conduct of Business sourcebook4.2424(4) Each provision
(1) 1This section applies to the authorised fund manager and the depositary of a non-UCITS retail scheme operating as a FAIF and to an ICVC which is a non-UCITS retail scheme operating as a FAIF.(2) Where this section refers to:(a) a rule or guidance in COLL 5.1 to COLL 5.6, these rules and guidance, and any rules and guidance to which they refer, must be read as if a reference to a UCITS scheme or non-UCITS retail scheme were a reference to a non-UCITS retail scheme operating
(1) This section contains rules on the types of permitted investments and any relevant limits with which non-UCITS retail schemes operating as FAIFs must comply. These rules allow for the relaxation of certain investment and borrowing powers from the requirements for non-UCITS retail schemes under COLL 5.6 .(2) One example2 of the different investment and borrowing powers under the rules in this section for non-UCITS retail schemes operating as FAIFs is the power to invest up
The following rules and guidance in COLL 5.6 (Investment powers and borrowing limits for non-UCITS retail schemes) apply to the authorised fund manager and the depositary of a non-UCITS retail scheme operating as a FAIF and to an ICVC which is a non-UCITS retail scheme operating as a FAIF:(1) COLL 5.6.3 R;(2) COLL 5.6.5 R to 5.6.6 R;(3) COLL 5.6.8 R to 5.6.9 R; and(4) COLL 5.6.11 R to 5.6.24 R.
(1) The scheme property of a non-UCITS retail scheme operating as a FAIF may, subject to the rules in this section, comprise any assets or investments to which it is dedicated.(2) For an ICVC, the scheme property may also include movable or immovable property that is necessary for the direct pursuit of the ICVC's business of investing in those assets or investments.(3) The scheme property must be invested only in accordance with the relevant provisions in this section that are
(1) This rule does not apply in respect of a transferable security or an approved money-market instrument to which COLL 5.6.8R (Spread: government and public securities) applies5.(2) Not more than 20% in value of the scheme property is to consist of deposits with a single body.(3) Not more than 10% in value of the scheme property is to consist of transferable securities or approved money-market instruments issued by any single body subject to COLL 5.6.23 R (Schemes replicating
The authorised fund manager of a non-UCITS retail scheme operating as a FAIF which is a feeder scheme must ensure that:(1) its master scheme; and(2) where its master scheme is itself a feeder scheme, any scheme into which that master scheme invests;operates on a basis that is consistent with the rules in this section notwithstanding any due diligence previously carried out which suggested that those schemes would so operate.
An authorised fund manager carrying out due diligence for the purpose of the rules in this section should make enquiries or otherwise obtain information needed to enable him properly to consider:(1) whether the experience, expertise, qualifications and professional standing of the second scheme's investment manager is adequate for the type and complexity of the second scheme;(2) the adequacy of the regulatory, legal and accounting regimes applicable to the second scheme and its
19For a common platform firm:
- (1)
the MiFID Org Regulation applies, as summarised in SYSC 1 Annex 1 3.2G, SYSC 1 Annex 1 3.2-AR and SYSC 1 Annex 1 3.2-BR; and
- (2)
the rules and guidance apply as set out in the table below:
Subject
Applicable rule or guidance
Risk assessment
Risk management
Risk control: remuneration
Risk control: additional provisions
Additional rules for CCR firms
19For a MiFID optional exemption firm and a third country firm:(1) the rules and guidance in this chapter apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(1); and(2) those articles of the MiFID Org Regulation in SYSC 1 Annex 1 2.8AR and 3.2CR apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(2).
Where a UCITS investment firm19 is not required under SYSC 7.1.6 R to maintain a risk management function that functions independently, it must nevertheless be able to demonstrate that the policies and procedures which it has adopted in accordance with SYSC 7.1.2 R to SYSC 7.1.5 R satisfy the requirements of those rules and are consistently effective.19
(1) 1The general application rule in ICOBS 1.1.1 R applies to this section subject to the modifications in (2).(2) This section applies to:(a) any firm solely with respect to the activities of:(i) carrying out contracts of insurance; or(ii) managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's;in relation to general insurance contracts and, in either case, including business accepted under reinsurance to close;(b) all incoming EEA firms or incoming
2A firm with potential liability under an excess policy and which satisfies the requirements in ICOBS 8 Annex 1 1.1B R must notify the FCA before the date upon which it first seeks to rely upon that rule and ensure that the requirements of ICOBS 8.4.6R (2) are satisfied in respect of this notification.
The conditions referred to in ICOBS 8.4.4R (2)(d) and ICOBS 8.4.7R (1)(a)(ii) are that the tracing office is one which:(1) maintains a database which:(a) accurately and reliably stores information submitted to it by firms for the purposes of complying with these rules;(b) has systems which can adequately keep it up to date in the light of new information provided by firms;(c) has an effective search function which allows a person inputting data included on the database relating
(1) ICOBS 8.4.4R (2)(b) and ICOBS 8.4.9R (1) require a firm, or a tracing office used by a firm, to have an effective search function in relation to the employers’ liability register database. In the FCA's view an effective search function is one which finds all matches in the register to any specified whole word.(2) For the purposes of ICOBS 8.4.9R (5) the term ‘without delay’ should have the same meaning as in ICOBS 8.4.5G (2). (3) In order to assist firms with their obligations
(1) A firm must notify the FCA:(a) of any information provided to the FCA under ICOBS 8.4.6 R or ICOBS 8.4.6A R2 which ceases to be true or accurate; and(b) of the new position, in accordance with the notification requirements in ICOBS 8.4.6 R;within one month of the change.(2) A firm producing an employers’ liability register must:(a) update the register with any new or more accurate information falling within ICOBS 8 Annex 1:(i) by virtue of the entry into or renewal of, or
(1) 3When a firm receives a request under ICOBS 8.4.14 R, from a qualifying tracing office, it must provide a response, in writing, to the requestor within one month of receiving the request.(2) This rule does not apply when the firm has conducted a search but no historical policies have been found.(3) When a firm receives a request under ICOBS 8.4.14 R, other than from a qualifying tracing office, it must provide a response, in writing, to the requestor within two months of receiving
(1) 3Where a firm has established that a historical policy does exist, the response should confirm what cover was provided and set out any available information that is relevant to the request received.(2) Where there is evidence to suggest that a historical policy does exist, but the firm is unable to confirm what cover was provided, the response should set out any information relevant to the request and describe the next steps (if any) the firm will take to continue the search.
The Handbook provisions relating to the IML levy are meant to follow closely the provisions relating to the payment of the periodic fees in FEES 4.3.1R. In the interests of brevity, not all of these provisions are set out again in FEES 13. In some cases, certain FEES 4rules are applied to the payment of the IML levy by individual rules in FEES 13. The rest are set out in the table in FEES 13.2.9R.
Table of rules in FEES 4 that also apply to FEES 13 to the extent that in FEES 4 they apply to fees payable to the FCA.
FEES 4 rules incorporated into FEES 13 |
Description |
Method of payment |
|
Calculation of periodic fee and tariff base for a firm’s second financial year |
|
How FEES 4.2.7R applies in relation to an incoming EEA firm or an incoming Treaty firm |
|
Extension of time |
|
FEES 4.2.11R (first entry only) |
Due date and changes in permission for periodic fees |
Group of firms |
|
Firms applying to cancel or vary permission before start of period |
|
Information on which fees are calculated |
This table belongs to COLL 5.5.1 R.
Rule |
Authorised fund manager of an AUT or ACS4 4 |
Depositary of an ICVC |
Depositary of an AUT or ACS |
||
5.5.3R |
x |
x |
|||
5.5.4R(1) to (3) |
x |
x |
|||
5.5.4R(4)&(5) |
x |
x |
|||
5.5.4R(6) |
x |
x |
|||
5.5.4R(7) |
x |
x |
x |
x |
x |
5.5.4R(8) |
x |
||||
5.5.5R(1) to (3) |
x |
x |
|||
5.5.6R(1)&(2) |
x |
x |
x |
||
5.5.6R(3) |
x |
||||
5.5.7R(1)-(3) |
x |
x |
x |
||
5.5.7R(4) |
x |
x |
x |
||
5.5.8R |
x |
x |
x |
||
5.5.9R |
x |
x |
x |
||
5.5.10G |
x |
x |
x |
x |
x |
Note: x means "applies" |
|||||
(1) The ICVC or depositary of an AUT or ACS4 (on the instructions of the authorised fund manager4) may, in accordance with this rule and COLL 5.5.5 R (Borrowing limits), borrow money for the use of the authorised fund on terms that the borrowing is to be repayable out of the scheme property.44(2) Paragraph (1) is subject to the obligation of the authorised fund to comply with any restriction in the instrument constituting the fund.55(3) The ICVC or depositary of an AUT or ACS4
(1) The authorised fund manager must ensure that the authorised fund's borrowing does not, on any day, exceed 10% of the value of the scheme property.(2) This rule does not apply to "back to back" borrowing under COLL 5.3.5 R (2)(Borrowing).(3) In this rule, borrowing includes, as well as borrowing in a conventional manner, any other arrangement (including a combination of derivatives) designed to achieve a temporary injection of money into the scheme property in the expectation
(1) The scheme property of an authorised fund other than money must not be lent by way of deposit or otherwise.(2) Transactions permitted by COLL 5.4 (Stock lending) are not to be regarded as lending for the purposes of (1).(3) The scheme property must not be mortgaged.(4) Where transactions in derivatives or forward transactions are used for the account of the authorised fund in accordance with any of the rules in this chapter, nothing in this rule prevents the ICVC or the depositary
(1) Any power in this chapter to invest in transferable securities may be used for the purpose of entering into transactions to which this rule applies, subject to compliance with any restriction in the instrument constituting the fund.55(2) This rule applies to any agreement or understanding which:(a) is an underwriting or sub-underwriting agreement; or(b) contemplates that securities will or may be issued or subscribed for or acquired for the account of the authorised fund.(3)
(1) An ICVC or a depositary for the account of an authorised fund must not provide any guarantee or indemnity in respect of the obligation of any person.(2) None of the scheme property of an authorised fund may be used to discharge any obligation arising under a guarantee or indemnity with respect to the obligation of any person.(3) Paragraphs (1) and (2) do not apply to:(a) any indemnity or guarantee given for margin requirements where the derivatives or forward transactions
Under section 294(4) of the Act, before the FCA1 may give a waiver of notification rules, it must be satisfied that:1(1) compliance by the recognised body with those notification rules, or with those rules as unmodified, would be unduly burdensome or would not achieve the purpose for which those rules were made; and(2) the waiver would not result in undue risk to persons whose interests those rules are designed to protect.
Any waiver given by the FCA1 under section 294 of the Act will be made in writing, stating: 1(1) the name of the recognised body in respect of which the waiver is made;(2) the notification rules which are to be waived or modified in respect of that body;(3) where relevant, the manner in which any rule is to be modified;(4) any condition or time limit to which the waiver is subject; and(5) the date from which the waiver is to take effect.
7This chapter applies to every:(1) firm or person who is subject to FCArules that wishes to apply for, consent to, or has been given a modification of or waiver of the FCA'srules; (2) person, as respects a particular AUT, ACS6 or ICVC, who wishes to apply for, consent to, or has been given a modification of or waiver of the rules in COLL.
This chapter is relevant to an applicant for a Part 4A permission7, as if that applicant were a firm. Where the chapter refers to appropriate7supervisory contact, the applicant should read this as being the usual supervisory7contact at7 the appropriate regulator7. Further, this chapter is relevant to a person who is subject to rules made by the appropriate regulator7 and where the chapter refers to a firm, this includes that person5.177577
2SUP 5.5.1R and SUP 5.5.5R apply to former CBTL firms in relation to their CBTL business as guidance and as if:(1) a reference to firm in those rules were a reference to a CBTL firm;(2) section 166 of the Act were a reference to section 166 of the Act as applied by article 23(2)(b) of the MCD Order; and(3) the word “must” were replaced by the word “should”.
7The purpose of this chapter is to give guidance on the FCA’s4 use of the power in section 166 (Reports by skilled persons) and section 166A (Appointment of skilled person to collect and update information) of the Act. The purpose is also to make rules requiring a firm to give assistance to a skilled person and, where a firm is required to appoint a skilled person, to include certain provisions in its contract with a skilled person. These rules are designed to ensure that the
This chapter, unless a rule in CONC 3 specifies differently, applies to:(1) a communication with a customer in relation to a credit agreement;(2) the communication or approval for communication of a financial promotion in relation to a credit agreement;(3) a communication with a customer in relation to credit broking;(4) the communication or approval for communication of a financial promotion in relation to credit broking;(5) a communication with a borrower or a prospective borrower
The clear fair and not misleading rule in CONC 3.3.1 R and the general requirements rule in CONC 3.3.2 R and the guidance inCONC 3.3.5 G to CONC 3.3.11 G also, unless a rule or guidance in those paragraphs specifies differently, apply to:(1) a communication with a customer in relation to debt counselling or debt adjusting; and(2) the communication or approval for communication of a financial promotion in relation to debt counselling or debt adjusting.
(1) CONC 3 does not apply (apart from the provisions in (2)) to a financial promotion or communication that consists of only one or more of the following:(a) the name or a trading name 3of the firm (or its appointed representative);(b) a logo;(c) a contact point (address (including e-mail address), telephone, facsimile number and website address);(d) a brief, factual description of the type of product or service provided by the firm.(2) The provisions in CONC 3 which apply to
CONC 3.1.7R (1) does not enable detailed information to be given about credit available from the firm. Firms should note that the image advertising exclusion in CONC 3.1.7R (1) is subject to compliance with the rules specified in (2), including the rules which require the inclusion of a representative APR in specified circumstances. A name or logo may trigger the requirement to include a representative APR. Firms should not include any information not referred to in CONC 3.1.7R
1Subject to SYSC 12.1.2 R to SYSC 12.1.4 R, this section applies to each of the following which is a member of a group:(1) a firm that falls into any one or more of the following categories:(a) a regulated entity that is:15(i) an investment firm, except a designated investment firm unless (ii) applies; or 15(ii) a credit institution or designated investment firm that is a subsidiary undertaking of a parent institution in a Member State that is an IFPRU investment firm;15(b)
Except as set out in SYSC 12.1.4 R, this section applies with respect to different types of group as follows:(1) SYSC 12.1.8 R and SYSC 12.1.10 R apply with respect to all groups, including UK-regulated EEAfinancial conglomerates,19 other financial conglomerates and groups dealt with in SYSC 12.1.13 R to 12SYSC 12.1.15 R12;19(2) the additional requirements set out in SYSC 12.1.11 R and SYSC 12.1.12 R only apply with respect to UK-regulated EEAfinancial conglomerates;19 and19(3)
(1) This rule applies in respect of the following rules:(a) SYSC 12.1.8R (2);(b) SYSC 12.1.10R (1), so far as it relates to SYSC 12.1.8R (2);(c) SYSC 12.1.10R (2); and(d) SYSC 12.1.11 R to SYSC 12.1.15 R.(2) The rules referred to in (1):(a) only apply with respect to a financial conglomerate if it is a UK-regulated EEA financial conglomerate;1919(b) (so far as they apply with respect to a group that is not a financial conglomerate) do not apply with respect to a group for
If this rule applies under SYSC 12.1.14 R to a firm, the firm must:(1) comply with SYSC 12.1.8R (2) in relation to any UK consolidation group or non-EEAsub-group of which it is a member, as well as in relation to its group; and(2) ensure that the risk management processes and internal control mechanisms at the level of any consolidation group or non-EEAsub-group of which it is a member comply with the obligations set out in the following provisions on a consolidated (or sub-consolidated)
In some cases the management of the systems and controls used to address the risks described in SYSC 12.1.8R (1) may be organised on a group-wide basis. If the firm is not carrying out those functions itself, it should delegate them to the group members that are carrying them out. However, this does not relieve the firm of responsibility for complying with its obligations under SYSC 12.1.8R (1). A firm cannot absolve itself of such a responsibility by claiming that any breach
SYSC 12.1.8R (1) deals with the systems and controls that a firm should have in respect of the exposure it has to the rest of the group. On the other hand, the purpose of SYSC 12.1.8R (2) and the rules in this section that amplify it is to require groups to have adequate systems and controls. However a group is not a single legal entity on which obligations can be imposed. Therefore the obligations have to be placed on individual firms. The purpose of imposing the obligations
21For a common platform firm:
- (1)
the MiFID Org Regulation applies, as summarised in SYSC 1 Annex 1 3.2G, SYSC 1 Annex 1 3.2-AR and SYSC 1 Annex 1 3.2-BR; and
- (2)
the rules and guidance apply as set out in the table below:
Subject
Applicable rule or guidance
General requirements
Business continuity
Audit committee
Persons who effectively direct the business
SYSC 4.2.1R, SYSC 4.2.2R, SYSC 4.2.3G, SYSC 4.2.4G, SYSC 4.2.5G, SYSC 4.2.6R
Responsibility of senior personnel
Management body
Nominations committee
21For a MiFID optional exemption firm and a third country firm: (1) the rules and guidance in this chapter apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(1); and(2) those articles of the MiFID Org Regulation in SYSC 1 Annex 1 2.8AR and 3.2CR apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(2).
3A firm that is not a common platform firm or a management company10 should take into account the decision-making procedures and effective internal reporting rules (SYSC 4.1.4R (1),10(3) and (4))10 as if they were guidance (and as if "should" appeared in those rules21 instead of "must") as explained in SYSC 1 Annex 1 3.3 R(1)21.5
Where a recognised body is required to give any notice or information under any notification rule, it may do so (unless that rule expressly provides otherwise) orally or in writing, whichever is the more appropriate in the circumstances, but, where it gives notice or information orally, it must confirm that notice or information in writing promptly.
Unless otherwise stated in the notification rule, a written notification required from a recognised body under any notification rule must be:(1) given to, or addressed for the attention of, the recognised body's usual supervisory contact at the FCA;11(2) delivered to the FCA1 by one of the methods in REC 3.2.3 R.1
If a notification rule requires notification within a specified period:(1) the recognised body must give the notification so as to be received by the FCA1 no later than the end of that period; and 1(2) if the end of that period falls on a day which is not a business day, the notification must be given so as to be received by the FCA1 no later than the first business day after the end of that period.1
2SUP 16.23.4R to SUP 16.23.7R (Annual Financial Crime Report) apply to an electronic money institution that has reported total revenue of £5 million or more as at its last accounting reference date as if a reference to firm in these rules and guidance were a reference to an electronic money institution and the reference to group is read accordingly.
SUP 16.3.11 R (Complete reporting) and SUP 16.3.13 R (Timely reporting) apply to an authorised electronic money institution and a small electronic money institution as if a reference to firm in these rules were a reference to an authorised electronic money institution and a small electronic money institution.
A UK UCITS management company that operates an EEA UCITS scheme must in relation to that activity comply with the rules which relate to:(1) the organisation of the management company, including delegation arrangements;(2) risk-management procedures;(3) prudential rules and supervision;(4) operating conditions; and(5) reporting requirements.[Note: article 19(1) of the UCITS Directive]
(1) Each EEA State, including the United Kingdom, is required to implement article 14 of the UCITS Directive by drawing up rules of conduct which management companies authorised in that State must observe at all times, except as explained in (3).(2) UK UCITS management companies operating an EEA UCITS scheme under the freedom to provide cross border services (otherwise than by establishing a branch in that State) are advised that, as provided for elsewhere in the Handbook, they
7For a common platform firm:
- (1)
the MiFID Org Regulation applies, as summarised in SYSC 1 Annex 1 3.2G, SYSC 1 Annex 1 3.2-AR and SYSC 1 Annex 1 3.2-BR; and
- (2)
the rules and guidance apply as set out in the table below:
Subject
Applicable rule or guidance
General requirements
7For a MiFID optional exemption firm and a third country firm:(1) the rules and guidance in this chapter apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(1); and(2) those articles of the MiFID Org Regulation in SYSC 1 Annex 1 2.8AR and 3.2CR apply to them as if they were rules or as guidance in accordance with SYSC 1 Annex 1 3.2CR(2).
SYSC 4.1.1 R requires
a firm to have effective processes to
identify, manage, monitor and report risks and internal control mechanisms.
Except in relation to those functions described in SYSC 8.1.5R and (for a common platform firm in article 30(2) of the MiFID Org Regulation)7, where a firm relies on a third party for the performance
of operational functions which are not critical or important for the performance
of relevant services and activities (see SYSC 8.1.1 R (1)) on a
Behaviour3conforming with any of the rules of the Takeover Codeabout the timing, dissemination or availability, content and standard of care applicable to a disclosure, announcement, communication or release of information, is unlikely to3, of itself, amount to market abuse, if:1(1) the rule is one of those specified in the table in
MAR 1.10.5G3;(2) the behaviour3is expressly required or expressly permitted by the rule in question (the notes for the time being associated
Behaviour3conforming with Rule 4.2 of the Takeover Code (in relation to restrictions on dealings by offerors and concert parties) will be unlikely to3, of itself, amount to market abuse, if:(1) the behaviour is expressly required or expressly permitted by that rule (the notes for the time being associated with the rules identified in the Takeover Code are treated as part of the rule for these purposes); and(2) it conforms to any General Principle set out at Section B of the Takeover
(1) This rule sets out how the calculations under BIPRU 5.6.11 R (Using the supervisory volatility adjustments or the own estimates volatility adjustments approaches to master netting agreements covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market driven transactions) must be modified under the IRB approach.(2) Where risk weighted exposure amounts and expected loss amounts are calculated under the IRB approach,
(1) This rule sets out how the calculations under BIPRU 5.6.24 R (Using the internal models approach to master netting agreements covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market driven transactions) must be modified under the IRB approach.(2) Where risk weighted exposure amounts and expected loss amounts are calculated under the IRB approach E is the exposure value for each separate exposure under
(1) This rule sets out how the calculations under BIPRU 5.6.29 R (Calculating risk-weighted exposure amounts and expected loss amounts for master netting agreements covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market driven transactions) must be modified under the IRB approach.(2) E* must be taken as the exposure value of the exposure to the counterparty arising from the transactions subject to the master
(1) This rule sets out how the calculations under BIPRU 5.4.28 R (Calculating adjusted values under the financial collateral comprehensive method) must be modified under the IRB approach.(2) E as referred to in the provisions listed in (1) is the exposure value as would be determined under the IRB approach if the exposure was not collateralised. For this purpose, where a firm calculates risk weighted exposure amounts under the IRB approach, the exposure value of the items listed
(1) This rule relates to the calculation of risk-weighted exposure amounts and expected loss amounts in the case of unfunded credit protection.(2) BIPRU 5.7.21 R (Tranching) applies for the purpose in (1).(3) The provisions in (4) replace those in BIPRU 5.7.22 R to BIPRU 5.7.25 R (Calculating risk weighted exposure amounts under the standardised approach in the case of unfunded credit protection).(4) For the covered portion of the exposure value E3 (based on the adjusted value