Related provisions for BIPRU 12.7.9
1 - 20 of 245 items.
BIPRU 7.8 sets out the method for calculating a net underwriting position or reduced net underwriting position, which is then included in the PRR calculation in other parts of BIPRU 7. It also deals with concentration risk. BIPRU 7.8 only relates to new securities, which is defined in BIPRU 7.8.12R.
A firm which underwrites or sub-underwrites an issue of securities must, for the purposes of calculating its market risk capital component1:(1) identify commitments to underwrite or sub-underwrite which give rise to an underwritingposition (see BIPRU 7.8.8R);(2) identify the time of initial commitment (see BIPRU 7.8.13R); and(3) calculate the net underwriting position (set out in BIPRU 7.8.17R), reduced net underwriting position or the net underwriting exposure.
The net underwriting position or reduced net underwriting position arising from underwriting or sub-underwriting a rights or warrants issue should be calculated using the current market price of the underlying security for the purposes of the equity PRR or option PRR. However, the PRR will be limited to the value of the net underwriting position calculated using the initial issue price of the rights or warrants. Where there is no market price because the rights or warrants are
(1) For the purpose of BIPRU 7.8.2R (1), a firm has a commitment to underwrite or sub-underwrite an issue of securities where:(a) it gives a commitment to an issuer of securities to underwrite an issue of securities; or(b) (where BIPRU 7.8.12R (2) applies) it gives a commitment to a seller of securities to underwrite a sale of those securities;(c) it gives a commitment to a person, other than the issuer of securities or, if BIPRU 7.8.12R (2) applies, the seller of the securities,
(1) A firm that buys and sells securities before issue is dealing in the grey market for the purposes of BIPRU 7.8.(2) BIPRU 7.8 does not apply to a firm with respect to its dealings in the grey market unless the firm:(a) has an underwriting commitment to the issuer in respect of those securities; or(b) has a sub-underwriting commitment in respect of those securities and is using the grey market solely for the purpose of reducing that sub-underwriting commitment.(3) BIPRU 7.8
For the purposes of BIPRU 7.8, a firm must treat securities as being new for the purposes of the definition of underwriting if they are:(1) securities that, prior to the allotment following the underwriting, were not in issue; or(2) securities that do not fall within (1) but that have not previously been offered for sale or subscription to the public and have not been admitted to trading on a market operated by a recognised investment exchange or an overseas investment exchan
Subject to BIPRU 7.8.14R, the time of initial commitment is the earlier of:(1) (in the case of underwriting) the time the firm agrees with the issuer of securities to underwrite those securities; or(2) (in the case of underwriting falling under BIPRU 7.8.12R (2)) the time the firm agrees with the seller of securities to underwrite those securities; or(3) (in the case of sub-underwriting) the time the firm agrees with the person referred to BIPRU 7.8.8R (1)(c) to sub-underwrite
A firm must calculate a net underwriting position by adjusting the gross amount it has committed to underwrite for:(1) any sales or sub-underwriting commitments received that have been confirmed in writing at the time of initial commitment (but excluding any sales in the grey market as defined in BIPRU 7.8.10R (1));(2) any underwriting or sub-underwriting commitments obtained from others since the time of initial commitment;(3) any purchases or sales of the securities since the
(1) This rule deals with the treatment of short positions that arise when a firm commits to distribute securities that it is underwriting in an amount that exceeds the allocation to the firm made by the issuer of the securities being underwritten.(2) When calculating its net underwriting position, a firm may use an over-allotment option granted to it by the issuer of the securities being underwritten to reduce the short positions in (1).(3) A firm may also use an over-allotment
7The scheme property of a UCITS scheme must, except where otherwise provided in the rules in this chapter, consist solely of any or all of:(1) transferable securities;(2) approved money-market instruments;(3) units in collective investment schemes;(4) derivatives and forward transactions; (5) deposits; and (6) (for an ICVC) movable and immovable property that is essential13 for the direct pursuit of the ICVC's business;13in accordance with the rules in this section.[Note: articles
(1) A transferable security is an investment which is any of the following:(a) a share;(b) a debenture;(ba) an alternative debenture;11(c) a government and public security;(d) a warrant; or(e) a certificate representing certain securities.(2) An investment is not a transferable security if the title to it cannot be transferred, or can be transferred only with the consent of a third party.(3) In applying (2) to an investment which is issued by a body corporate, and which is a share
(1) 7A UCITS scheme may invest in a transferable security only to the extent that the transferable security fulfils the following criteria:(a) the potential loss which the UCITS scheme may incur with respect to holding the transferable security is limited to the amount paid for it;(b) its liquidity does not compromise the ability of the authorised fund manager to comply with its obligation to redeemunits at the request of any qualifying unitholder (see COLL 6.2.16 R (3) );(c)
7Where the authorised fund manager considers that the liquidity or negotiability of a transferable security might compromise the ability of the authorised fund manager to comply with its obligation to redeemunits at the request of any qualifying unitholder, it should assess the liquidity risk in accordance with CESR's UCITS eligible assets guidelines with respect to article 2(1) of the UCITS eligible assets Directive.
7A unit in a closed end fund shall be taken to be a transferable security for the purposes of investment by a UCITS scheme, provided it fulfils the criteria for transferable securities set out in COLL 5.2.7A R, and either:(1) where the closed end fund is constituted as an investment company or a unit trust:(a) it is subject to corporate governance mechanisms applied to companies; and(b) where another person carries out asset management activity on its behalf, that person is subject
(1) 7A UCITS scheme may invest in any other investment which shall be taken to be a transferable security for the purposes of investment by a UCITS scheme provided the investment:(a) fulfils the criteria for transferable securities set out in COLL 5.2.7A R; and(b) is backed by or linked to the performance of other assets, which may differ from those in which a UCITS scheme can invest.(2) Where an investment in (1) contains an embedded derivative component (see COLL 5.2.19R (3A)),
(1) [deleted]77(2) [deleted]77(3) Transferable securities and approved money-market instruments7 held within a UCITS scheme must be:777(a) admitted to or dealt in on an eligible market within COLL 5.2.10 R (1)(a) (Eligible markets: requirements); or(b) dealt in on an eligible market within COLL 5.2.10 R (1)(b); or(c) admitted to or dealt in on an eligible market within COLL 5.2.10 R (2); or(d) for an approved money-market instrument not admitted to or dealt in on an eligible market,
(1) This section specifies criteria based on those in article 5013 of the UCITS Directive, as to the nature of the markets in which the property of a UCITS scheme may be invested.13(2) Where a market ceases to be eligible, investments on that market cease to be approved securities. The 10% restriction in COLL 5.2.8 R (4) applies, and exceeding this limit because a market ceases to be eligible will generally be regarded as a breach beyond the control of the authorised fund man
(1) 7A UCITS scheme may invest in an approved money-market instrument if it is:(a) issued or guaranteed by any one of the following:(i) a central authority of the United Kingdom or25 an EEA State or, if the EEA State is a federal state, one of the members making up the federation;(ii) a regional or local authority of the United Kingdom or25 an EEA State;(iii) the Bank of England,25 the European Central Bank or a central bank of an EEA State;(iv) the European Union or the European
(1) This rule does not apply in respect of a transferable security or an approved money-market instrument to which COLL 5.2.12R (Spread: government and public securities) applies21.(2) For the purposes of this rule companies included in the same group for the purposes of consolidated accounts as defined in accordance with section 399 of Companies Act 2006, Directive 2013/34/EU25 or, in the same group in accordance with international accounting standards, are regarded as a single
(1) This rule applies in respect of a transferable security or an approved money-market instrument (“such securities”) that is issued by:21(a) the United Kingdom or 2521an EEA State;(b) 21a local authority of the United Kingdom or 25 an EEA State;(c) 21a non-EEA State; or(d) 21a public international body to which the UK or25 one or more EEA States belong.(2) Where no more than 35% in value of the scheme property is invested in such securities issued by any one body, there is no
(1) COLL 9.3 gives further detail as to the recognition of a scheme under section 27218of the Act.18(2) A 25 scheme18 which has the power to invest in gold or immovables would not meet the criteria set out in COLL 5.2.13R (1).1813131818(3) 8In determining whether a scheme (other than a UCITS)18 meets the requirements of COLL 5.2.13AR25 for the purposes ofCOLL 5.2.13R (1),18 the authorised fund manager should consider the following factors before deciding that the scheme provides
(1) [deleted]77(2) A transferable security or an approved money-market instrument7on which any sum is unpaid falls within a power of investment only if it is reasonably foreseeable that the amount of any existing and potential call for any sum unpaid could be paid by the UCITS scheme, at the time when payment is required, without contravening the rules in this chapter.7
(1) A transaction in derivatives or a forward transaction must not be effected for a UCITS scheme unless:(a) the transaction is of a kind specified in COLL 5.2.20 R (Permitted transactions (derivatives and forwards)); and(b) the transaction is covered, as required by COLL 5.3.3A R (Cover for investment in derivatives and forward transactions).1313(2) Where a UCITS scheme invests in derivatives, the exposure to the underlying assets must not exceed the limits in COLL 5.2.11 R (Spread:
(1) 7Collateralised debt obligations (CDOs) or asset-backed securities using derivatives, with or without an active management, will generally not be considered as embedding a derivative except if:(a) they are leveraged, i.e. the CDOs or asset-backed securities are not limited recourse vehicles and the investors' loss can be higher than their initial investment; or(b) they are not sufficiently diversified.(2) Where a transferable security or approved money-market instrument embedding
(1) A transaction in a derivative must:(a) be in an approved derivative; or(b) be one which complies with COLL 5.2.23 R (OTC transactions in derivatives).(2) The underlying of a transaction in a derivative must consist of any one or more of the following to which the scheme is dedicated:(a) transferable securities permitted under COLL 5.2.8 R (3)(a) to (c) and COLL 5.2.8 R (3)(e)7;(b) approved money-market instruments7 permitted underCOLL 5.2.8 R (3)(a) to COLL 5.2.8 R (3)(d)7;77(c)
(1) An ICVC must not acquire transferable securities issued by a body corporate and carrying rights to vote (whether or not on substantially all matters) at a general meeting of that body corporate if:(a) immediately before the acquisition, the aggregate of any such securities held by the ICVC gives the ICVC power to influence significantly the conduct of business of that body corporate; or(b) the acquisition gives the ICVC that power.(2) For the purpose of (1), an ICVC is to
(1) An authorised fund manager17 must not acquire, or cause to be acquired for an AUT or ACS17 of which it is the authorised fund manager17, transferable securities issued by a body corporate and carrying rights to vote (whether or not on substantially all matters) at a general meeting of the body corporate if:1717(a) immediately before the acquisition, the aggregate of any such securities held for that AUT or ACS17, taken together with any such securities already held for other
A UCITS scheme:(1) must not acquire transferable securities (other than debt securities) which:(a) do not carry a right to vote on any matter at a general meeting of the body corporate that issued them; and(b) represent more than 10% of those securities issued by that body corporate;(2) must not acquire more than 10% of the debt securities issued by any single body;(3) must not acquire more than 25% of the units in a collective investment scheme;(4) must not acquire more than
(1) 21Authorised fund managers of UCITS schemes 25 should bear in mind that where a UCITS scheme25 employs particular investment strategies such as those in (2)21, COBS 4.13.2R (Marketing communications relating to UCITS schemes25) and COBS 4.13.3R (Marketing communications relating to a feeder UCITS) contain additional disclosure requirements in relation to marketing communications that concern those investment strategies.(2) 21Examples of investment strategies that require these
(1) 15A syndicated loan for the purposes of this guidance means a form of loan where a group or syndicate of parties lend money to a third party and, in return, receive interest payments during the life of the debt and a return of principal either at the end of the loan period or amortised over the life of the loan. Such loans are usually arranged through agent banks which may, among other things, maintain a record of the lenders’ interest in the loan and arrange or act as a
(1) To be listed, securities must be freely transferable.
[Note: articles 46, 54 and 60 CARD](2) To be listed, shares must be fully paid and free from
all liens and from any restriction on the right of transfer (except any restriction
imposed for failure to comply with a notice under section 793 of the Companies Act 2006 (Notice
by company requiring information about interests in its shares)).11
The FCA may modify LR 2.2.4 R to allow partly paid securities to be listed if
it is satisfied that their transferability is not restricted and investors
have been provided with appropriate information to enable dealings in the securities to take place on an open and
proper basis. [Note: articles 46 and 54 CARD]
(1) The expected aggregate market value
of all securities (excluding treasury shares ) to be listed must
be at least:(a) £700,000 for shares; and(b) £200,000 for debt securities.(2) Paragraph (1) does not apply to
tap issues where the amount of the debt securities is
not fixed.(3) Paragraph (1) does not apply if securities of the same class are
already listed. [Note:
articles 43 and 48 CARD]
An application for listing of securities of any class must:(1) if no securities of
that class are already listed, relate to all securities of
that class, issued or proposed
to be issued; or(2) if securities of
that class are already listed, relate to all further securities of that class,
issued or proposed to be issued. [Note: articles
49, 56 and 62 CARD]
Convertible
securities and miscellaneous securities giving the holder
the right to buy or subscribe for other securities2may be admitted to listing only if the securities into
which they are convertible or
over which they give a right to buy or subscribe2are already, or will become at
the same time:(1) listedsecurities; or(2) securities listed
on a regulated, regularly operating, recognised open market. [Note:
article 59 CARD]
For a placing of rights arising from a rights issue before the official start of dealings, a listed company must ensure that:(1) the placing relates to at least 25% of the maximum number of equity securities6 offered;(2) the placees are committed to take up whatever is placed with them;(3) the price paid by the placees does not exceed the price at which the equity securities6which are 6the subject of the rights issue are offered by more than one half of the calculated premium
In a rights issue, the FCA may list the equity securities6 at the same time as they 6are admitted to trading in nil paid form. On the equity securities6 being paid up and the allotment becoming unconditional, the listing will continue without any need for a further application to list fully paid securities.
If existing shareholders6do not take up their rights to subscribe in a rights issue:6(1) the listed company must ensure that the equity securities6to which the offer relates are offered for subscription or purchase on terms that any premium obtained over the subscription or purchase price (net of expenses) is to be for the account of the holders, except that if the proceeds for an existing holder do not exceed 5.00, the proceeds may be retained for the company's benefit; and(2)
A listed company must ensure that in relation to communicating information on an open offer:(1) if the offer is subject to shareholder approval in general meeting the announcement must state that this is the case; and(2) the circular dealing with the offer must not contain any statement that might be taken to imply that the offer gives the same entitlements as a rights issue unless it is an offer with a compensatory element.7
7If existing shareholders do not take up their rights to subscribe in an open offer with a compensatory element:(1) the listed company must ensure that the equity securities to which the offer relates are offered for subscription or purchase on terms that any premium obtained over the subscription or purchase price (net of expenses) is to be for the account of the holders, except that if the proceeds for an existing holder do not exceed £5, the proceeds may be retained for the
7A listed company must ensure that for a subscription in an open offer with a compensatory element the following are notified to a RIS as soon as possible:(1) the offer price and principal terms of the offer; and(2) the results of the offer and, if any securities not taken up are sold, details of the sale, including the date and price per share.
(1) If a listed company makes an open offer, placing, vendor consideration placing, offer for subscription of equity shares or an issue out of treasury (other than in respect of an employees’ share scheme)3 of a class already listed, the price must not be at a discount of more than 10% to the middle market price of those shares at the time of announcing the terms of the offer for an open offer or offer for subscription of equity shares8 or at the time of agreeing the placing for
A listed company must ensure that for an offer for sale or an offer for subscription of equity securities:(1) letters of allotment or acceptance are all issued simultaneously and numbered serially (and, where appropriate, split and certified by the listed company's registrars);(2) if the equity securities6 may be held in uncertificated form, there is equal treatment of those who elect to hold the equity securities6 in certificated form and those who elect to hold them in uncertificated
If, for an issue of equity securities6 (other than an issue in lieu of dividend), a shareholders entitlement includes a fraction of a security, a listed company must ensure that the fraction is sold for the benefit of the holder except that if its value (net of expenses) does not exceed 5.00 it may be sold for the company's benefit. Sales of fractions may be made before listing is granted.
A listed company must ensure that any temporary document of title (other than one issued in global form) for an equity security:(1) is serially numbered;(2) states where applicable:(a) the name and address of the first holder and names of joint holders (if any);(b) for a fixed income security, the amount of the next payment of interest or dividend;(c) the pro rata entitlement;(d) the last date on which transfers were or will be accepted for registration for participation in the
A listed company must ensure that any definitive document of title for an equity share6 (other than a bearer security) includes the following matters on its face (or on the reverse in the case of paragraphs (5) and (7)):6(1) the authority under which the listed company is constituted and the country of incorporation and registered number (if any);(2) the number or amount of securities the certificate represents and, if applicable, the number and denomination of units (in the top
(1) For a firm adopting the financial collateral comprehensive method, the effects of bilateral netting contracts covering repurchase transactions, securities or commodities lending or borrowing transactions, and/or other capital market-driven transactions with a counterparty may be recognised.(2) Without prejudice to BIPRU 14 to be recognised the collateral taken and securities or commodities borrowed within such agreements must comply with the eligibility requirements for collateral
For master netting agreements covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market-driven transactions1 to be recognised for the purposes of BIPRU 5, they must:(1) be legally effective and enforceable in all relevant jurisdictions, including in the event of the bankruptcy or insolvency of the counterparty;(2) give the non-defaulting party the right to terminate and close-out in a timely manner all transactions
In calculating the ‘fully adjusted exposure value’ (E*) for the exposures subject to an eligible master netting agreement covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market-driven transactions, a firm must calculate the volatility adjustments to be applied in the manner set out in BIPRU 5.6.6 R to BIPRU 5.6.11 R either using the supervisory volatility adjustments approach or the own estimates of volatility
A firm must calculate the net position in each type of security or commodity by subtracting from the total value of the securities or commodities of that type lent, sold or provided under the master netting agreement, the total value of securities or commodities of that type borrowed, purchased or received under the agreement.[Note:BCD Annex VIII Part 3 point 6]
For the purposes of BIPRU 5.6.6 R, type of security means securities which are issued by the same entity, have the same issue date, the same maturity and are subject to the same terms and conditions and are subject to the same liquidation periods as indicated in BIPRU 5.4.30 R to BIPRU 5.4.64R3.[Note: BCD Annex VIII Part 3 point 7]
A firm must calculate the net position in each currency other than the settlement currency of the master netting agreement by subtracting from the total value of securities denominated in that currency lent, sold or provided under the master netting agreement added to the amount of cash in that currency lent or transferred under the agreement, the total value of securities denominated in that currency borrowed, purchased or received under the agreement added to the amount of cash
E* must be calculated according to the following formula:E* = max {0, [(∑(E) -∑ (C)) + ∑ (|net position in each security| x Hsec) + (∑|Efx| x Hfx)]}where:(1) (where risk weighted exposure amounts are calculated under the standardised approach) E is the exposure value for each separate exposure under the agreement that would apply in the absence of the credit protection;(2) C is the value of the securities or commodities borrowed, purchased or received or the cash borrowed or received
The master netting agreement internal models approach1 is an alternative to using the supervisory volatility adjustments approach or the own estimates of volatility adjustments approach in calculating volatility adjustments for the purpose of calculating the ‘fully adjusted exposure value’ (E*) resulting from the application of an eligible master netting agreement covering repurchase transactions, securities or commodities lending or borrowing transactions and/or other capital
2This paragraph provides guidance in relation to BIPRU 5.6.19R (8). In carrying out the stress testing programme, a firm should evaluate the simultaneous impact of individual stress scenarios on its counterparty exposures, its positions and the aggregate amount of margin calls that it would receive. A firm's stress scenarios should take into account the possibility that the liquidation period may be substantially longer than 5 days for repurchase transactions and securities lending
The fully adjusted exposure value (E*) for a firm using the master netting agreement internal models approach must be calculated according to the following formula:E* = max {0, [(∑E -∑C) + (VaR output of the internal models)]}where(1) (where risk weighted exposure amounts are calculated under the standardised approach) E is the exposure value for each separate exposure under the agreement that would apply in the absence of the credit protection;(2) C is the value of the securities
If an application is made for the admission of certificates representing certain securities, the issuer of the securities which the certificates represent is the issuer for the purpose of the listing rules and the application will be dealt with as if it were an application for the admission of the securities.
For the certificates to be listed, the securities which the certificates represent must:(1) conform with the law of the issuer's place of incorporation;(2) be duly authorised according to the requirements of the issuer's constitution; and(3) have any necessary statutory or other consents. [Note: Articles 45 and 53 CARD]
(1) For the certificates to be listed, the securities which the certificates represent must be freely transferable. [Note: Articles 46, 54 and 60 CARD](2) For the certificates to be listed, the securities which the certificates represent must be fully paid and free from all liens and from any restriction on the right of transfer (except any restriction imposed for failure to comply with a notice under section 793 of the Companies Act 2006 (Notice by company requiring information
The FCA may modify LR 18.2.5 R to allow partly paid securities if it is satisfied that their transferability is not restricted and investors have been provided with appropriate information to enable dealings in the securities to take place on an open and proper basis. [Note: Articles 46 and 54 CARD]
To be listed, the certificates representing certain securities must satisfy the requirements set out in LR 2.2.2 R to LR 2.2.11 R. For this purpose, in those rules references to securities are to be read as references to the certificates representing certain securities for which application for listing is made.
A depositary that issues certificates representing certain securities must maintain adequate arrangements to safeguard certificate holders' rights to4 the securities to which the certificates relate, and to4 all rights relating to the securities and all money and benefits that it may receive in respect of them, subject only to payment of the remuneration and proper expenses of the issuer of the certificates.4
(1) This section contains rules on the types of permitted investments and any relevant limits with which non-UCITS retail schemes must comply. These rules allow for the relaxation of certain investment and borrowing powers from the requirements applicable to UCITS schemes.23(2) Some examples of the different investment and borrowing powers under the rules in this section for non-UCITS retail schemes are the power to:(a) invest not more than 10% of the value of scheme property
(1) The scheme property of a non-UCITS retail scheme 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 applicable to that
Transferable securities and money-market instruments held within a non-UCITS retail scheme must:(1) 2(a) be admitted to or dealt in on an eligible market within COLL 5.2.10 R (Eligible markets: requirements); or9(b) be recently issued transferable securities which satisfy the requirements for investment by a UCITS scheme set out in COLL 5.2.8 R (3)(e); or9(c) be approved money-market instruments not admitted to or dealt in on an eligible market which satisfy the requirements for
(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) applies21. (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 money-market instruments issued by any single body subject to COLL 5.6.23 R (Schemes replicating an index).(3A)
(1) This rule applies in respect of a transferable security or an approved money-market instrument (“such securities”) that is issued or guaranteed by:21(a) the UK or2321an EEA State; or(b) 21a local authority of the UK or23 an EEA State; or(c) 21a non-EEA State; or(d) 21a public international body to which the UK or23 one or more EEA States belong.(2) The requirements in COLL 5.2.12 R (Spread: government and public securities) apply to investment in such securities21by a non-UCITS
A non-UCITS retail scheme, except for a feeder NURS (which must instead comply with COLL 5.6.26 R),17 must not invest in units in a collective investment scheme (second scheme) unless the second scheme meets each of the requirements at (1) to (5)3:3(1) the second scheme:(a) is a UCITS scheme or23 satisfies the conditions necessary for it to enjoy the rights conferred by the UCITS Directive as implemented in the EEA23; or(b) is a non-UCITS retail scheme; or(c) is a recognised scheme;
(1) A transaction in derivatives or a forward transaction must not be effected for a non-UCITS retail scheme unless the transaction is:(a) of a kind specified in COLL 5.6.13 R2 (Permitted transactions (derivatives and forwards)); and2(b) covered, as required by COLL 5.3.3A R (Cover for investment in derivatives and forward transactions).1414(2) Where a scheme invests in derivatives, the exposure to the underlying assets must not exceed the limits in COLL 5.6.7 R (Spread: general)
(1) A transaction in a derivative must be within COLL 5.2.20 R (1) (Permitted transactions (derivatives and forwards)) and:(a) the underlying must be within COLL 5.6.4 R (5) (Investment powers: general) or COLL 5.2.20R (2)(f) to (i)2; and2(b) the exposure to the underlying must not exceed the limits in COLL 5.6.7 R (Spread: general),9COLL 5.6.8 R (Spread: government and public securities) and COLL 5.6.5 R (2).99(2) A transaction in an approved derivative must be effected on or
The following limits apply in respect of immovables held as part of scheme property of a scheme:(1) not more than 15% in value of the scheme property is to consist of any one immovable;(2) in (1), immovables within COLL 5.6.18 R (4) (b) (Investment in property) must be regarded as one immovable;(3) the figure of 15% in (1) may be increased to 25% once the immovable has been included in the scheme property in compliance with (1);(4) the income receivable from any one group in any
The following rules in Chapter 5 apply to a non-UCITS retail scheme:(1) COLL 5.2.7 R (Transferable securities);(2) COLL 5.5.1 R(Application) and COLL 5.5.2 R (Table of application)2;(3) COLL 5.5.3 R (Cash and near cash);(4) COLL 5.5.4 R (1), COLL 5.5.4 R (2), COLL 5.5.4 R (3) and COLL 5.5.4R (8) (General power to borrow);(5) COLL 5.5.5 R (1) and3COLL 5.5.5 R (2) (Borrowing limits);33(6) COLL 5.5.6 R (Restrictions on lending of money) ;(7) COLL 5.5.7 R (1), (2) and (4)2 (Restrictions
(1) 16COLL 5.2.35 G (Guidance on syndicated loans) is equally applicable to investment by a non-UCITS retail scheme in a syndicated loan.(2) Where a loan falls within the Glossary definition of a transferable security, investment in such a loan in the case of a non-UCITS retail scheme is subject to the spread requirements in COLL 5.6.7 R (Spread: general). AFMs also need to bear in mind that where such a transferable security does not meet the requirements of COLL 5.6.5 R (1)
(1) Where the credit risk mitigation used relies on the right of a firm to liquidate or retain assets, eligibility depends upon whether risk weighted exposure amounts, and, as relevant, expected loss amounts, are calculated under the standardised approach or the IRB approach.(2) Eligibility further depends upon whether the financial collateral simple method is used or the financial collateral comprehensive method.(3) In relation to repurchase transactions and securities or commodities
In relation to BIPRU 5.4.2 R (2) to (5):(1) where a security has two credit assessments by eligible ECAIs, the less favourable assessment must be deemed to apply;(2) in cases where a security has more than two credit assessments by eligible ECAIs:(a) the two most favourable assessments must be deemed to apply; or(b) if the two most favourable credit assessments are different, the less favourable of the two must be deemed to apply.[Note:BCD Annex VIII Part 1 point 10]
The low correlation conditions referred to in BIPRU 5.4.9 R (1) are as follows:(1) (a) the credit quality of the obligor and the value of the collateral must not have a material positive correlation; and(b) securities issued by the obligor, or any related group entity are not eligible.(2) notwithstanding (1)(b), the obligor's own issues of covered bonds falling within the terms of BIPRU 3.4.107 R to BIPRU 3.4.109 R may be recognised as collateral for repurchase transactions, provided
In the case of a firm using the financial collateral comprehensive method, where an exposure takes the form of securities or commodities sold, posted or lent under a repurchase transaction or under a securities or commodities lending or borrowing transaction, and margin lending transactions the exposure value must be increased by the volatility adjustment appropriate to such securities or commodities as prescribed in BIPRU 5.4.30 R to BIPRU 5.4.64R5.[Note: BCD Article 78(1), third
(1) For secured lending transactions the liquidation period is 20 business days.(2) For repurchase transactions (except insofar as such transactions involve the transfer of commodities or guaranteed rights relating to title to commodities) and securities lending or borrowing transactions the liquidation period is 5 business days.(3) For other capital market-driven transactions1, the liquidation period is 10 business days.[Note:BCD Annex VIII Part 3 point 37]
For non-eligible securities or for commodities lent or sold under repurchase transactions or securities or commodities lending or borrowing transactions, the volatility adjustment is the same as for non-main index equities listed on a recognised investment exchange or a designated investment exchange.[Note:BCD Annex VIII Part 3 point 39]
In determining relevant categories, a firm must take into account the type of issuer of the security the external credit assessment of the securities, their residual maturity, and their modified duration. Volatility estimates must be representative of the securities included in the category by the firm.[Note:BCD Annex VIII Part 3 point 44]
The liquidation period is 20 business days for secured lending transactions; 5 business days for repurchase transactions except insofar as such transactions involve the transfer of commodities or guaranteed rights relating to title to commodities and securities lending or borrowing transactions; and 10 business days for other capital market-driven transactions1.[Note:BCD Annex VIII Part 3 point 48]
In relation to repurchase transaction and securities lending or borrowing transactions, where a firm uses the supervisory volatility adjustments approach or the own estimates of volatility adjustments approach and where the conditions set out in (1) – (8) are satisfied, a firm may, instead of applying the volatility adjustments calculated under BIPRU 5.4.30 R to BIPRU 5.4.61 R, apply a 0% volatility adjustment:(1) both the exposure and the collateral are cash or debt securities
Section 80 (1) of the Act (general duty of disclosure in listing
particulars) requires listing particulars submitted
to the FCA to contain all such information as investors
and their professional advisers would reasonably require, and reasonably expect
to find there, for the purpose of making an informed assessment of:(1) the assets and liabilities, financial
position, profits and losses, and prospects of the issuer of
the securities; and(2) the rights attaching to the securi
(1) The listing
particulars must contain a summary that
complies with the requirements in article 7 of the Prospectus Regulation, PRR 4.1.2R and Chapter I of the Prospectus RTS Regulation (as if those requirements
applied to the listing particulars).64(2) Paragraph (1) does not apply:(a) in relation to specialist
securities referred to in LR 4.1.1R (2);
or(b) if, in accordance with article 7(1) of the Prospectus Regulation5,
no summary would be required
in relation to the sec
The following minimum information from
the PR Regulation5 must be included
in listing particulars:(1) for an issue of bonds including
bonds convertible into the issuer's shares or exchangeable into a third party issuer'sshares or
derivative securities1, irrespective of the denomination
of the issue, the minimum information required by Annexes 7 and 15 of the PR Regulation5;11(2) the additional information required
by Annexes 17 and 18 of the PR Regulation5 where
relevant;(3) for
Part 3 of the Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001 (SI 2001/2956)
sets out the persons responsible
for listing particulars. In
particular, in those regulations:(1) regulation 6 specifies who is generally
responsible for listing particulars;
and(2) regulation 9 modifies the operation
of regulation 6 in relation to specialist
securities.
(1) In the case of listing
particulars for specialist
securities:(a) the issuer must
state in the listing particulars that
it accepts responsibility for the listing particulars;(b) the directors may
state in the listing particulars that
they accept responsibility for the listing
particulars; and(c) other persons may
state in the listing particulars that
they accept responsibility for all or part of the listing
particulars and in that case the statement by the issuer or directors
A request by an issuer for the listing of its securities to be suspended or cancelled must be in writing and must include:(1) the issuer's name;(2) details of the securities to which it relates and the RIEs on which they are traded;(3) a clear explanation of the background and reasons for the request;(4) the date on which the issuer requests the suspension or cancellation to take effect;(5) for a suspension, the time the issuer wants the suspension to take effect;(6) if relevant,
The issuer must also include with a request to cancel the listing of its securities the following:(1) if the cancellation is to take effect after the completion of the compulsory acquisition procedures under Chapter 3 of Part 281 of the Companies Act 20061, a copy of the notice sent to dissenting shareholders of the offeree together with written confirmation that there have been no objections made to the court within the prescribed period;11(2) for a cancellation referred to in
(1) If an issuer requests the FCA to suspend or cancel the listing of its securities, it may withdraw its request at any time before the suspension or cancellation takes effect. The withdrawal request should initially be made by telephone and then confirmed in writing as soon as possible, with an explanation of the reasons for the withdrawal.(2) Even if an issuer withdraws its request, the FCA may still suspend or cancel the listing of the securities if it considers it is necessary
4If an issuer requests the FCA to suspend or cancel the listing of its securities under LR 5.3.1 R and the FCA agrees to do so, the notification given by the FCA to the issuer will include the following information: (1) the date on which the suspension or cancellation took effect or will take effect;(2) details of the suspension or cancellation; and (3) in relation to requests for suspension, details of the issuer's right to apply for the suspension of its listed securities to
(1) An issuer's listed miscellaneous
securities must be admitted to trading on a RIE's market
for listed securities at
all times.(2) An issuer must
inform the FCA in writing as soon as possible if it
has:(a) requested a RIE to
admit or re-admit any of its listed miscellaneous securities to trading; or(b) requested a RIE to
cancel or suspend trading of any of its listed miscellaneous securities; or(c) been informed by a RIE that the trading of any of its listed miscellaneous
securities
In the FCA view, this means that the reasonable investor must be satisfied that what he will get when he realises his investment is his proportionate share in the value of BC's underlying assets, less any dealing costs. In other words, that he is satisfied he will get net asset value. The investment condition focuses on the way the body corporate operates over time, and not by reference to particular issues of shares or securities (see PERG 9.6.3 G (The investment condition (section
For the 'satisfaction test' to be met, there must be objectively justifiable grounds on which the reasonable investor could form a view. He must be satisfied that the value of BC's property will be the basis of a calculation used for the whole, or substantially the whole, of his investment. The FCA considers that the circumstances, or combination of circumstances, in which a reasonable investor would be in a position to form this view include:(1) where the basis of net asset valuation
PERG 9.9.3 G (2)and PERG 9.9.3 G (3) refer to circumstances where the reasonable investor may be satisfied that he can realise his investment at net asset value because of arrangements made to ensure that the shares or securities trade at net asset value on a market. There may, for example, be cases of market dealing where the price of shares or securities will not depend on the market. An example is where BC or a third party undertakes to ensure that the market value reflects
However, where there is a market, the FCA does not consider that the test in section 236(3)(b) would be met if the price the investor receives for his investment is wholly dependent on the market rather than specifically on net asset value. In the FCA's view, typical market pricing mechanisms introduce too many uncertainties to be able to form a basis for calculating the value of an investment (linked to net asset value) of the kind contemplated by the satisfaction test. As a
The fact that the definition must be applied to BC as a whole (see PERG 9.6.3 G (The investment condition (section 236(3) of the Act): general)) is also relevant here. So, for example, in a take-over situation the fact that a bidder may be willing to provide an exit route for an investment at net asset value will be irrelevant within the context of the definition. This is so even if an investor invests in particular shares or securities in the knowledge or expectation or in anticipation
The expression 'wholly or mainly' in section 236(3)(b) determines the extent of the permissible departure from the link between the price of BC's shares or securities and the value of its net assets. The word 'mainly' introduces some flexibility to the process to allow for limited account to be taken of factors other than the value of BC's assets that may result in the sum realised failing to reflect the true net asset value. Such factors may include:(1) the payment by the investor
A circular relating to a resolution proposing to grant the directors' authority to allot shares or other securities pursuant to section 551 (Power of directors to allot shares etc: authorisation by company) of the Companies Act 20066 must include:(1) a statement of the maximum amount of shares or other securities6 which the directors will have authority to allot and the percentage which that amount represents of the total ordinary share capital in issue (excluding treasury shares)
A circular relating to a resolution proposing to disapply pre-emption rights provided by LR 9.3.11 R must include:77123772377(1) a statement of the maximum amount of equity securities which the disapplication will cover; and(2) if there is a general disapplication for equity securities for cash made otherwise than to existing shareholders in proportion to their existing holdings, the percentage which the amount generally disapplied represents of the total equity share capital5
(1) A circular relating to a resolution proposing a capitalisation or bonus issue must include:(a) the reason for the issue;(b) a statement of the last date on which transfers were or will be accepted for registration to participate in the issue;(c) details of the proportional entitlement; and(d) a description of the nature and amount of reserves which are to be capitalised.(2) Any timetable set out in the circular must have been approved by the RIE on which the company'sequity
(1) A circular containing an offer to shareholders of the right to elect to receive shares instead of all or part of a cash dividend must include:(a) a statement of the total number of shares that would be issued if all eligible shareholders were to elect to receive shares for their entire shareholdings, and the percentage which that number represents of the equity shares (excluding treasury shares) in issue at the date of the circular;(b) in a prominent position, details of the
A circular to shareholders about the approval of an employee's share scheme or long-term incentive scheme must:(1) include either the full text of the scheme or a description of its principal terms;(2) include, if directors of the listed company are trustees of the scheme, or have a direct or indirect interest in the trustees, details of the trusteeship or interest;(3) state that the provisions (if any) relating to:(a) the persons to whom, or for whom, securities, cash or other
The resolution approving the adoption of an employees' share scheme or long-term incentive scheme may authorise the directors to establish further schemes based on any scheme which has previously been approved by shareholders but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under such further schemes are treated as counting against any limits on individual or overall participation in
(1) A circular to holders of listed securities convertible into shares reminding them of the times when conversion rights are exercisable must include:(a) the date of the last day for lodging conversion forms and the date of the expected sending of the certificates;(b) a statement of the market values for the securities on the first dealing day in each of the six months before the date of the circular and on the latest practicable date before sending the circular;(c) the basis
(1) An issuer that has the listing of any of its securities suspended may request the FCA to have them restored.(2) The request should be made sufficiently in advance of the time and date the issuer wishes the securities to be restored.(3) Requests received for when the market opens should allow sufficient time for the FCA to deal with the request.(4) The request may be an oral request. The FCA may require documentary evidence that the events that lead to the suspension are no
(1) If an issuer has requested the FCA to restore the listing of any securities, it may withdraw its request at any time while the securities are still suspended. The withdrawal request should initially be made by telephone and then confirmed in writing as soon as possible.(2) Even if a request to restore has been withdrawn, the FCA may restore the listing of securities if it believes the circumstances justify it.
Except as permitted under BIPRU 7.6.5R, a firm'soption PRR calculation must include:(1) each trading bookposition in an option on an equity, interest rate or debt security;(2) each trading bookposition in a warrant on an equity or debt security;(3) each trading bookposition in a CIU; and(4) each trading book and non-trading bookposition in an option on a commodity, currency or gold.
(1) The in the money percentage is calculated in accordance with this rule.(2) For a call option:Current market price of underlying - Strike price of the option * 100Strike price of the option(3) For a put option:Strike price of option - Current market price of underlying * 100Strike price of the option(4) In the case of an option on a basket of securities a firm may not treat the option as being in the money by the relevant percentage so as to enable the firm not to apply an
Table: Appropriate position risk adjustment
This table belongs to BIPRU 7.6.7R
Underlying position |
|
The position risk adjustment applicable to the underlying equity or equity index in the table in BIPRU 7.3.30R (Simplified equity method) |
|
Interest rate |
The sum of the specific risk position risk adjustment (see BIPRU 7.2.43R to BIPRU 7.2.51G (Specific risk calculation)) and the general market risk position risk adjustment (as set out in BIPRU 7.2.57R (General market riskposition risk adjustments)) applicable to the underlying position |
Debt securities |
The sum of the specific risk position risk adjustment (see BIPRU 7.2.43R to BIPRU 7.2.51G (Specific risk calculation)) and the general market risk position risk adjustment (as set out in the table in BIPRU 7.2.57R (General market riskposition risk adjustments)) applicable to the underlying position |
18% (unless BIPRU 7.6.7R requires otherwise) |
|
Currency |
8% |
Gold |
8% |
32% (subject to BIPRU 7.6.6R and BIPRU 7.6.7R) |
Table: Derived positions
This table belongs to BIPRU 7.6.9R
Underlying |
Option (or warrant) |
Derived position |
Option (warrant) on a single equity or option on a future/forward on a single equity |
A notional position in the actual equity underlying the contract valued at the current market price of the equity. |
|
Option (warrant) on a basket of equities or option on a future/forward on a basket of equities |
A notional position in the actual equities underlying the contract valued at the current market price of the equities. |
|
Option (warrant) on an equity index or option on a future/forward on an equity index |
A notional position in the index underlying the contract valued at the current market price of the index. |
|
Interest rate |
A zero coupon zero-specific-risk security in the currency concerned with a maturity equal to the sum of the time to expiry of the contract and the length of the period on which the settlement amount of the contract is calculated valued at the notional amount of the contract. |
|
A zero coupon zero-specific-risk security in the currency concerned with a maturity equal to the length of the swap valued at the notional principal amount. |
||
Interest rate cap or floor |
A zero coupon zero-specific-risk security in the currency concerned with a maturity equal to the remaining period of the cap or floor valued at the notional amount of the contract. |
|
Debt securities |
Option (warrant) on a debt security or option on a future/forward on a debt security |
The underlying debt security with a maturity equal to the time to expiry of the option valued as the nominal amount underlying the contract at the current market price of the debt security. |
Option (warrant) on a basket of debt securities or option on a future/forward on a basket of debt securities |
A notional position in the actual debt securities underlying the contract valued at the current market price of the debt securities. |
|
Option (warrant) on an index of debt securities or option on a future/forward on an index of debt securities |
A notional position in the index underlying the contract valued at the current market price of the index. |
|
Option on a commodity or option on a future/forward on a commodity |
An amount equal to the tonnage, barrels or kilos underlying the option with (in the case of a future/forward on a commodity) a maturity equal to the expiry date of the forward or Futures contract underlying the option. In the case of an option on a commodity the maturity of the position falls into Band 1 in the table in BIPRU 7.4.28R (Table: Maturity bands for the maturity ladder approach). |
|
An amount equal to the tonnage, barrels or kilos underlying the option with a maturity equal to the length of the swap valued at the notional principal amount. |
||
(These provisions about CIUs are subject to BIPRU 7.6.35R) |
Option (warrant) on a single CIU or option on a future/forward on a single CIU |
A notional position in the actual CIU underlying the contract valued at the current market price of the CIU. |
Option (warrant) on a basket of CIUs or option on a future/forward on a basket of CIUs |
A notional position in the actual CIUs underlying the contract valued at the current market price of the CIUs. |
|
Gold |
An amount equal to the troy ounces underlying the option with (in the case of a future/forward on gold) a maturity equal to the expiry date of the forward or futures contract underlying the option. |
|
Currency |
Currency option |
The amount of the underlying currency that the firm will receive if the option is exercised converted at the spot rate into the currency that the firm will sell if the option is exercised. |
Table: Option strategies
This table belongs to BIPRU 7.6.14R
Option strategy (and an example) |
Notional option (and rule it must be treated under) |
Bull Spread (e.g. buy 100 call and sell 101 call) |
One purchased option (treat under BIPRU 7.6.20R) |
Bear Spread (e.g. sell 100 put and buy 101 put) |
One written option (treat under BIPRU 7.6.21R) |
Synthetic Long Call (e.g. long underlying and buy 100 put) |
One purchased option (treat under BIPRU 7.6.20R or BIPRU 7.6.24R) |
Synthetic Short Call (e.g. short underlying and sell 100 put) |
One written option (treat under BIPRU 7.6.21R or BIPRU 7.6.24R) |
Synthetic Long Put (e.g. short underlying and buy 100 call) |
One purchased option (treat under BIPRU 7.6.20R or BIPRU 7.6.24R) |
Synthetic Short Put (e.g. buy underlying and sell 100 call) |
One written option (treat under BIPRU 7.6.21R or BIPRU 7.6.24R) |
Long Straddle (e.g. buy 100 call and buy 100 put) |
One purchased option (treat under BIPRU 7.6.20R) |
Short Straddle (e.g. sell 100 call and sell 100 put) |
One written option (treat under BIPRU 7.6.21R but with no reduction for the amount the option is out of the money) |
Long Strangle (e.g. buy 101 call and buy 99 put) |
One purchased option (treat under BIPRU 7.6.20R) |
Short Strangle (e.g. sell 99 call and sell 101 put) |
One written option (treat under BIPRU 7.6.21R but with no reduction for the amount the option is out of the money) |
Long Butterfly (e.g. buy one 100 call, sell two 101 calls, and buy one 102 call) |
One purchased option (treat under BIPRU 7.6.20R) |
Short Butterfly (e.g. sell one 100 put, buy two 101 puts, and sell one 102 put) |
One written option (treat under BIPRU 7.6.21R but with no reduction for the amount the option is out of the money) |
Under the option standard method, the PRR for underwriting or sub-underwriting an issue of warrants is the net underwriting position (or reduced net underwriting position) multiplied by the current market price of the underlying securities multiplied by the appropriate position risk adjustment, but the result can be limited to the value of the net underwriting position (or reduced net underwriting position) calculated using the issue price of the warrant.
Table: Appropriate treatment for equities, debt securities or currencies hedging options
This table belongs to BIPRU 7.6.24R
Hedge |
PRR calculation for the hedge |
Limits (if hedging method is used) |
Naked position |
The equity must be treated in either BIPRU 7.3 (equity PRR) or the option hedging method (see the table in BIPRU 7.6.27R) |
The option hedging method must only be used up to the amount of the hedge that matches the notional amount underlying the option or warrant |
To the extent that the amount of the hedge (or option or warrant) exceeds the notional amount underlying the option or warrant (or hedge), a firm must apply an equity PRR, interest rate PRR or foreign currencyPRR (or the option standard method) |
|
The debt security must be treated in BIPRU 7.2 (interest rate PRR) or the option hedging method (see the table in BIPRU 7.6.27R) |
As for the first row |
As for the first row |
|
Gold (hedging a gold option) |
The gold must be treated in either BIPRU 7.5 (Foreign currency PRR) or the option hedging method (see the table in BIPRU 7.6.27R) |
As for the first row |
As for the first row |
A currency or currencies (hedging a currency option) |
The currency must be treated in either BIPRU 7.5 (Foreign currency PRR) or the option hedging method (see the table in BIPRU 7.6.28R) |
As for the first row |
As for the first row |
Table: The hedging method of calculating the PRR (equities, debt securities and gold)
This table belongs to BIPRU 7.6.24R(1) - (3)
PRR |
||||
In the money by more than the position risk adjustment |
In the money by less than the position risk adjustment |
|||
Long in security or gold |
Long put |
Zero |
Wp |
X |
Short call |
Y |
Y |
Z |
|
Short in security or gold |
Long call |
Zero |
Wc |
X |
Short put |
Y |
Y |
Z |
|
Where: |
||||
Wp means |
{(position risk adjustment-100%) x The underlying position valued at strike price} |
+ |
The market value of the underlying position |
|
Wc means |
{(100% +position risk adjustment x The underlying position valued at strike price} |
- |
The market value of the underlying position |
|
X means |
The market value of the underlying position multiplied by the appropriate position risk adjustment |
|||
Y means |
The market value of the underlying position multiplied by the appropriate position risk adjustment. This result may be reduced by the market value of the option or warrant, subject to a maximum reduction to zero. |
|||
Z means |
The option hedging method is not permitted; the option standard method must be used. |
|||
Both the activities of dealing in investments as principal and dealing in investments as agent are defined in terms of 'buying, selling, subscribing for or underwriting' certain investments. These investments are:(1) for dealing in investments as principal, securities or contractually based investments (except rights under a funeral plan contract); and(2) for dealing in investments as agent, securities, structured deposits26 and relevant investments (except rights under a funeral
11(1) [deleted]3326(2) [deleted]3326(3) [deleted]3326(4) [deleted]3326(5) An emission allowance is a security. This means that any person wishing to carry out any activity in relation to it will need to consider whether any of the regulated activities relating to securities apply (subject to (8)). 26(6) A derivative on an emission allowance is potentially a contractually based investment and a relevant investment. Therefore any person wishing to carry out any activity in relation
There are ten93 arranging activities that are regulated activities under the Regulated Activities Order. These are:39(1) arranging (bringing about) deals in investments which are securities, relevant investments, structured deposits26 or the underwriting capacity of a Lloyd's syndicate or membership of a Lloyd's syndicate (article 25(1));(2) making arrangements with a view to transactions in investments which are securities, relevant investments, structured deposits26 or the underwriting
(1) 26The regulated activity of operating an organised trading facility only covers a trading facility on which non-equity MiFID instruments are traded.(2) Subject to (3), a non-equity MiFID instrument means:(a) a debenture, an alternative debenture, a government and public security, a warrant, a certificate representing certain securities, a unit, an emission allowance, an option, a future or a contract for differences; or(B) rights to or interests in investments relating to
The regulated activity of managing investments includes several elements.(1) First, a person must exercise discretion. Non-discretionary portfolio management (where the manager buys and sells, as principal or agent, on the instructions of some other person) is not caught by this activity, although it may be caught by a different regulated activity such as the activity of dealing in investments as principal or dealing in investments as agent. The discretion must be exercised in
The property that is safeguarded and administered must belong beneficially to another person. It must consist of (or include) securities or contractually based investments. Alternatively, safeguarding and administration will generally be caught if it is possible that the property could consist of (or include) such securities or investments. This is the case even if the property in question has never consisted of (or included) such securities or investments, as long as there have
The regulated activities relating to sending dematerialised instructions relate to the operation of the system for electronic transfer of title to securities or contractually based investments. This is the CREST settlement14 system maintained under the Uncertificated Securities Regulations 2001 (SI 2001/3755) (and currently operated by Euroclear UK & Ireland Limited14 ). Sending instructions on behalf of another is a regulated activity, as is causing such instructions to be sent
The regulated activity of advising on investments (except P2P agreements)25 under article 53(1)25 of the Regulated Activities Order applies to advice on securities, structured deposits26 or relevant investments. It does not, for example, include giving advice about deposits (except structured deposits)26, or about things that are not specified investments for the purposes of the Regulated Activities Order. 19 Giving advice on certain other specified investments is, however, regulated
Certain activities carried on in connection with business at Lloyds will be regulated. In addition to those already mentioned (arranging deals in the underwriting capacity of a Lloyd's syndicate or membership of a Lloyd'ssyndicate), there are three other regulated activities as follows.(1) Managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's is a regulated activity. 'Managing agent' is defined in article 3(1) of the Regulated Activities Order.(2)
(1) PRA Rulebook: Non-Solvency II firms: Insurance Company – Capital Resources 13.36 requires firms to consider first whether an asset is a derivative or quasi-derivative transaction notwithstanding that it is also capable of falling within one or more other categories in PRA Rulebook: Non-Solvency II firms: Insurance Company – Capital Resources 13.16. If it is a derivative or quasi-derivative transaction it is only admissible if it satisfies the conditions for it to be approved
For the purposes of INSPRU 3.2.36R (1)(c), collateral is adequate only if it:(1) is transferred to the firm or its agent or, in the case of a letter of credit, meets the conditions described in INSPRU 3.2.38A R;(2) is, at the time of the transfer or, in the case of a letter of credit, at the time of issue, at least equal in value to the value of the securities transferred, or consideration provided, by the firm; and(3) is of adequate quality.
For the purposes of assessing adequate quality in INSPRU 3.2.38R (3), reference should be made to the criteria for credit risk loss mitigation set out in INSPRU 2.1.16 R. The valuation rules in PRA Rulebook: Non-Solvency II firms: Insurance Company – Overall Resources and Valuation6 apply for the purpose of determining the value of both collateral received, and the securities transferred, by the firm. In addition, where collateral takes the form of assets transferred, under the
For the purposes of INSPRU 3.2.36R (1)(c), collateral is sufficiently immediate only if:(1) it is transferred or, in the case of a letter of credit, issued before, or at the same time as, the transfer of the securities by the firm; or(2) it will be transferred or, in the case of a letter of credit, issued, at latest, by the close of business on the day of the transfer.
Collateral continues to be adequate only if its value is at all times at least equal to the value of the securities transferred by the firm. This will be satisfied in respect of collateral where the validity of the collateral or the firm's interest in the collateral is about to expire or has expired if sufficient collateral will again be transferred or issued at the latest by the close of business on the day of expiry.