Related provisions for GENPRU 2.2.16

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IPRU-INV 5.4.7GRP
[deleted]2
EG 8.2.6RP
1Examples of circumstances in which the FCA will consider varying a firm'sPart 4A permission because it has serious concerns about a firm, or about the way its business is being or has been conducted include where: (1) in relation to the grounds for exercising the power under section 55J(1)(a) or section 55L(2)(a) of the Act, the firm appears to be failing, or appears likely to fail, to satisfy the threshold conditions relating to one or more, or all, of its regulated activities,
IPRU-INV 9.3.1RRP
A firm'sinitial capital consists of the sum of the following items: (1) ordinary share capital which is fully paid; (2) perpetual non-cumulative preference share capital which is fully paid; (3) share premium account; (4) reserves excluding revaluation reserves; (5) audited retained earnings; (6) externally verified interim net profits; (7) partners' capital; (8) eligible LLP members' capital
CONC App 1.2.5RRP
For the purposes of calculating the total charge for credit and the annual percentage rate of charge:2(a) it shall be assumed that the regulated credit agreement is to remain valid for the period agreed and that the lender and the borrower will fulfil their obligations under the terms and by the dates specified in that agreement;(b) in the case of a regulated credit agreement allowing variations in(i) the rate of interest, or(ii) where applicable, charges contained in the annual
BIPRU 3.6.18RRP
Notwithstanding BIPRU 3.6.17 R, if a short-term rated facility is assigned a 150% risk weight, then all unrated unsecured exposures on that obligor whether short-term or long-term must also be assigned a 150% risk weight.[Note: BCD Annex VI Part 3 point 14]
SUP 9.3.2GRP
The FCA6 may give individual guidance to a firm on its own initiative if it considers it appropriate to do so. For example:6(1) the FCA6 may consider that general guidance in the Handbook does not appropriately fit a firm's particular circumstances (which may be permanent or temporary) and therefore decide to give additional individual guidance to the firm;6(2) some of the FCA's6 requirements are expressed in general terms; however, there may be times when the FCA6 will wish to

Glossary of defined terms for Chapter 9

Note: If a defined term does not appear in the glossary below, the definition appearing in the HandbookGlossary applies.

approved exchange

means an investment exchange listed as such in Appendix 33 to IPRU-INV 3.

exchange

means a recognised investment exchange or designated investment exchange.

initial capital

means the initial capital of a firm calculated in accordance with section 9.3.

intangible assets

the full balance sheet value of a firm's intangible assets including goodwill, capitalised development costs, licences, trademark and similar rights etc.

intermediate broker

in relation to a margined transaction, means any person through whom the firm undertakes that transaction.

material current year losses

means losses of an amount equal to 10% or more of initial capital minus B (with B calculated in accordance with Table 9.5.2R).

material holding

means a firm's holdings of shares and any other interest in the capital of a credit institution or financial institution:

(a) which exceeds 10% of the capital of the issuer, and, where this is the case, any holdings of subordinated debt of the same issuer, the full amount is a material holding; or

(b) holdings not deducted under (a) if the total amount of such holdings exceeds 10% of that firm'sown funds, in which case only the excess amount is a material holding.

material insurance holdings

(a) means the holdings of an exempt CAD firm of items of the type set out in (b) in any:

(i) insurance undertaking; or

(ii) insurance holding company that fulfils one of the following conditions:

(iii) it is a subsidiary undertaking of that firm; or

(iv) that firm holds a participation in it.

(b) An item falls into this provision for the purpose of (a) if it is:

(i) an ownership share; or

(ii) subordinated debt or another item of capital that forms part of the tier two capital resources that1 falls into GENPRU 2 or, as the case may be, INSPRU 7, or is an item of “basic own funds” defined in the PRA Rulebook: Glossary.

own funds

means the own funds of a firm calculated in accordance with 9.2.9R(2) and The Interim Prudential Sourcebook for Investment Businesses Chapter 9: Financial resources requirements for an exempt CAD firm Page 2 of 2 Version: November 2007 9.2.8R(b).

own funds requirement

means the requirement set out in 9.2.9R(1) and 9.2.8R(b).

verified

means checked by an external auditor who has undertaken at least to:

(a) satisfy himself that the figures forming the basis of the interim profits have been properly extracted from the underlying accounting records;

(b) review the accounting policies used in calculating the interim profits so as to obtain comfort that they are consistent with those normally adopted by the firm in drawing up its annual financial statements and are in accordance with the relevant accounting principles;

(c) perform analytical procedures on the result to date, including comparisons of actual performance to date with budget and with the results of prior period(s);

(d) discuss with management the overall performance and financial position of the firm;

(e) obtain adequate comfort that the implications of current and prospective litigation, all known claims and commitments, changes in business activities and provisioning for bad and doubtful debts have been properly taken into account in arriving at the interim profits; and

(f) follow up problem areas of which he is already aware in the course of auditing the firm's financial statements.

BIPRU 9.3.11DRP
1An originator's application for a waiver of the requirements in BIPRU 9.3.7R and BIPRU 9.3.8R must demonstrate that the following conditions are satisfied:(1) it has policies and methodologies in place which ensure that the possible reduction of capital requirements which the originator achieves by the securitisation is justified by a commensurate transfer of credit risk to third parties; and(2) that such transfer of credit risk to third parties is also recognised for the purposes
DEPP 6.5A.3GRP
(1) The FCA2 may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the breach. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.2(2) The following list of factors may have the effect of aggravating or mitigating the breach:(a) the conduct of the firm in bringing (or failing
SUP 3.2.1GRP
This chapter sets out rules and guidance on the role auditors play in the appropriate regulator's monitoring of firms' compliance with the requirements and standards under the regulatory system. In determining whether a firm satisfies the threshold conditions, the appropriate regulator has regard to whether the firm has appointed auditors with sufficient experience in the areas of business to be conducted by the firm. Auditors act as a source of information for the appropriate
BIPRU 12.4.12GRP
A contingency funding plan sets out a firm's strategies for addressing liquidity shortfalls in emergency situations. Its aim should be to ensure that, in each of the stresses required by BIPRU 12.4.1R, it would still have sufficient liquidity resources to ensure that it can meet its liabilities as they fall due.
REC 2.1.4GRP

Location of recognition requirements and guidance

Recognition Requirements Regulations

Subject

Section in REC 2/other parts of the Handbook5

Regulation 6

Method of satisfying recognition requirements

2.2

Part I of the Schedule

UK RIE recognition requirements

Paragraph 1

Financial resources

2.3

Paragraph 2

Suitability

2.4

5Paragraphs 2A and 2B

Management Body

2.4A

Paragraphs 3, 3A, 3B, 3C, 3D, 3E, 3G and 3H5

Systems and controls, market making agreements, halting trading, direct electronic access, co-location services, fee structures, algorithmic trading, tick size regimes, synchronisation of business clocks5

2.5

Paragraphs 4(1), 4(2)(aa) and 4C5

22

General safeguards for investors and publication of data regarding execution of transactions5

2.6

Paragraph 4(2)(a)

Access to facilities

2.7

5

5

5

Paragraph 4(2)(c)

Availability of relevant information

2.12

Paragraph 4(2)(d)

Settlement

2.8

Paragraph 4(2)(e)

Transaction recording

2.9

2Paragraph 4(2)(ea)

Conflicts

2.5

Paragraph 4(2)(f) and 4(2)(fa)5

Financial crime and market abuse

2.10

Paragraph 4(2)(g)

Custody

2.11

Paragraph 4(3)

Definition of relevant information

2.12

5

2

5

5

5

2

5

5

Paragraph 6

Promotion and maintenance of standards

2.13

Paragraph 7

Rules and consultation

2.14

Paragraphs 7A and 9ZB (regulated markets only)5

2

Admission of financial instruments to trading

2.12

Paragraphs 7B, 7C and 9ZC (regulated markets only)5

2

Access to facilities

2.7

5Paragraphs 7BA & 7BB

Position management and position reporting re commodity derivatives

2.7A

2Paragraph 7D

Settlement and clearing facilitation services5

2.8

Paragraphs 7E and 7F5

2

Suspension and removal of financial instruments from trading

2.6

Paragraph 8

Discipline

2.15

Paragraph 9

Complaints

2.16

Paragraphs 9A, 9B, 9C, 9D, 9E, 9F, 9G, 9H and 9ZD5

2

Operation of a multilateral trading facility or an organised trading facility5

2.16A/MAR 5 and MAR 5A

5Paragraph 9ZA (regulated markets only)

Order execution

2.6

5Paragraph 9K

Provision of data reporting services

2.16B/ MAR 9

Part II of the Schedule

UK RIE default rules in respect of market contracts

2.174

BIPRU 4.5.6RRP
(1) A firm using the methods set out in BIPRU 4.5.8 R (Slotting) for assigning risk weights for specialised lending exposures must assign each of these exposures to a grade in accordance with BIPRU 4 Annex 1 R, taking into account the following factors:(a) financial strength;(b) political and legal environment;(c) transaction and/or asset characteristics;(d) strength of the sponsor and developer including any public private partnership income stream; and(e) security package.(2)
LR 5.6.5ARRP
6A shell company is an issuer whose: (1) assets consist solely or predominantly of cash or short-dated securities; or(2) predominant purpose or objective is to undertake an acquisition or merger, or a series of acquisitions or mergers.
TC App 6.1.1GRP

1Introduction

1.

An accredited body is a body appearing in the list of such bodies in the Glossary.1

1

2.

Information on accredited bodies, including guidance on the process for including an applicant body in the list, is set out below and the obligation to pay the application fee is set out in FEES 3.2.

3.

[deleted]1

1

Process for including a body in the list of accredited bodies

4.

In considering the compatibility of a proposed addition with the statutory objectives, the FCA will determine whether the applicant will, if accredited, contribute to securing an appropriate degree of protection for consumers having regard in particular to:

(1)

the matters set out in paragraphs 10 to 20; and

(2)

the rules and practices of the applicant.

5.

An application to the FCA to be added to the list of accredited bodies should set out how the applicant will satisfy the criteria in paragraphs 10 to 20. The application should be accompanied by a report from a suitable auditor which sets out its independent assessment of the applicant's ability to meet these criteria. An application form is available from the FCA upon request.

6.

When considering an application for accredited body status the FCA may:

(1)

carry out any enquiries and request any further information that it considers appropriate, including consulting other regulators;

(2)

ask the applicant or its specified representative to answer questions and explain any matter the FCA considers relevant to the application;

(3)

take into account any information which the FCA considers appropriate to the application; and

(4)

request that any information provided by the applicant or its specified representative is verified in such a manner as the FCA may specify.

7.

The FCA will confirm its decision in writing to the applicant.

8.

The FCA will enter into an agreement with the applicant or accredited body which will require the accredited body to meet, among other obligations, the criteria and expectations set out in this Appendix or other parts of the Handbook, as amended from time to time.5 Approval as an accredited body becomes effective only when the name of the applicant is added to the Glossary definition of accredited body.

9.

Paragraphs 10 to 20 set out the criteria which an applicant should meet to become an accredited body and which an accredited body should meet at all times.

Acting in the public interest and furthering the development of the profession

10.

The FCA will expect an accredited body to act in the public interest, to contribute to raising consumer confidence and professional standards in the retail investment advice market and to promoting the profession.

Carrying out effective verification services

11.

If independent verification of a retail investment adviser's professional standards has been carried out by an accredited body, the FCA will expect the accredited body to provide the retail investment adviser with evidence of that verification in a durable medium and in a form agreed by the FCA. This is referred to in this Appendix and TC 2.15 as a ‘statement of professional standing’.

12.

The FCA will expect an accredited body to have in place effective procedures for carrying out its verification activities. These should include:

(1)

verifying that each retail investment adviser who is a member of or subscriber to the accredited body's verification service has made an annual declaration in writing that the retail investment adviser has, in the preceding 12 months, complied with APER or4COCON2(as applicable)4 and completed the continuing professional development required under TC 2.1.15 R;1

(2)

verifying annually the continuing professional development records of no less than 10% of the retail investment advisers who have used its service in the previous 12 months to ensure that the records are accurate and the continuing professional development completed by the retail investment advisers is appropriate; and

(3)

verifying that, if required by TC, the retail investment advisers who use its services have attained an appropriate qualification. This should include, where relevant, checking that appropriate qualification gap-fill records have been completed by the retail investment advisers.

13.

The FCA will not expect an accredited body to carry out the verification in paragraph 12(3) if a retail investment adviser provides the accredited body with evidence in a durable medium which demonstrates that another accredited body has previously verified the retail investment adviser's appropriate qualification, including, where relevant, appropriate qualification gap-fill.

14.

The FCA will expect an accredited body to make it a contractual condition of membership (where a retail investment adviser is a member of the accredited body) or of using its verification service (where a retail investment adviser is not a member of the accredited body) that, as a minimum, the accredited body will not continue to verify a retail investment adviser's standards and will3 withdraw its statement of professional standing if5:

(1) it is provided with false information in relation to a retail investment adviser’s qualifications or continuing professional development;5

(2) it is provided with a false declaration in relation to a retail investment adviser’s compliance with APER or COCON (as applicable); or5

(3) the retail investment adviser becomes subject to a prohibition order.5

In this regard, an accredited body must have in place appropriate decision-making procedures with a suitable degree of independence and transparency.

2223234334

Having appropriate systems and controls in place and providing evidence to the FCA of continuing effectiveness

15.

The FCA will expect an accredited body to ensure that it has adequate resources and systems and controls in place in relation to its role as an accredited body.

16.

The FCA will expect an accredited body to have effective procedures in place for the management of conflicts of interest and have a well-balanced governance structure that engages a broad set of qualities and competences,5 with at least one member who is independent of the sector.

17.

The FCA will expect an accredited body to have a code of ethics and to ensure that its code of ethics and verification service terms and conditions do not contain any provisions that conflict with APER or COCON (as applicable)4.

2

Ongoing cooperation with the FCA

18.

The FCA will expect an accredited body to provide the FCA with such documents and information as the FCA reasonably requires, and to cooperate with the FCA in an open and transparent manner.

19.

The FCA will expect an accredited body to share information as soon as reasonably practicable with the FCA (subject to any legal constraints, including those in data protection legislation)5 in relation to the professional standards of the retail investment advisers who use its service as appropriate. Examples might include conduct issues, complaints, dishonestly obtaining or falsifying qualifications or continuing professional development, a failure to complete appropriate continuing professional development, or the accredited body’s decision to withdraw or not renew a retail financial adviser’s statement of professional standing. 5The FCA will expect an accredited body to notify the firm if issues such as these arise.

20.

The FCA will expect an accredited body to submit to the FCA, every 2 years, a5 report by a suitable independent auditor which sets out that auditor’s assessment of the quality of the body’s satisfaction of the criteria in paragraphs 10 to 19 in the preceding 245months and whether, in the auditor’s view, the body is capable of satisfying the criteria in the subsequent 245months. The FCA will expect this report to be submitted to the FCA every 2 years, within 35months of the anniversary of the date on which the accredited body was added to the Glossary definition of accredited body.

Withdrawal of accreditation

21.

If an accredited body fails or, in the FCA's view, is likely to fail to satisfy the criteria, the FCA will discuss this with the accredited body concerned. If, following a period of discussion, the accredited body has failed to take appropriate corrective action to ensure that it satisfies and will continue to satisfy the criteria, the FCA will withdraw the accredited body’s accreditation. Withdrawal of an accredited body’s accreditation will be reflected in the Handbook by amending the list published under the Glossary definition of accredited body5. The FCAFCA will expect the body to notify each retail investment adviser holding a current statement of professional standing of the FCA's decision. A statement of professional standing issued by the accredited body before the withdrawal of accreditation will continue to be valid until its expiration.

REC 2.2.6GRP
In determining whether the UK recognised body meets the recognition requirement in Regulation 6(3), the FCA3 may have regard to whether that body has ensured that the person who performs that function on its behalf:3(1) has sufficient resources to be able to perform the function (after allowing for any other activities);(2) has adequate systems and controls to manage that function and to report on its performance to the UK recognised body;(3) is managed by persons of sufficient
IPRU-INV 5.9.1RRP

1Liquid Capital Requirement = Initial Capital Requirement + Capital Surcharge

Calculation of Initial Capital Requirement

ICR = (√AUA) x K1

Where

ICR

means Initial Capital Requirement

AUA

means Assets Under Administration calculated as the sum of the most recent annual valuations over the preceding 12 months of the personal pension schemes administered by the firm, and adjusted to include any revaluation of assets that may occur between the date of the most recent annual valuation and the date when the firm must calculate its AUA.

A firm must calculate its AUA quarterly in line with the dates when it has to submit its regulatory capital reporting form in accordance with SUP 16.12 (Integrated Regulatory Reporting).

Where it is not possible to value an asset (for example because there is no readily available market price), the most recent market valuation should be used.

Where it would be reasonable to assume that the value of the asset has changed by more than 15% since the most recent market valuation, a firm should instead use a reasonable estimate. This is without prejudice to any requirement on a firm to provide a personal pension scheme member with accurate and timely valuations of their portfolios.

K1

is set subject to the firm’s AUA as specified in the below table:

AUA

K1 constant to be applied

<£100m

10

£100-£200m

15

>£200m

20

When K1 changes due to an increase in AUA, in accordance with the thresholds in this table, the firm must apply the new K1 value within six months following the date on which its AUA exceeded the threshold of its previous K1 value.

Calculation of Capital Surcharge

CS =(√P) x K2 x ICR

Where

CS

means Capital Surcharge

P

means the fraction of personal pension schemes administered by the firm which contain one or more asset types which do not appear in the list of Standard Assets below, at the most recent quarter end. For example, if a quarter of personal pensions contained non-Standard Assets, this would be inputted in to the formula as 0.25.

K2

is set at 2.5.

ICR

means the Initial Capital Requirement calculated as above.

Standard Assets

The List of Standard Assets is as follows (subject to Note 1):

Cash

Cash funds

Deposits

Exchange traded commodities

Government & local authority bonds and other fixed interest stocks

Investment notes (structured products)

Shares in Investment trusts

Managed pension funds

National Savings and Investment products

Permanent interest bearing shares (PIBs)

Physical gold bullion

Real estate investment trusts (REITs)

Securities2 admitted to trading on a regulated venue

UK commercial property

Units in regulated collective investment schemes2

NOTE 1:

A Standard Asset must be capable of being accurately and fairly valued on an ongoing basis and readily realised within 30 days, whenever required.

NOTE 2:

In addition to complying with the provisions of IPRU-INV 5.8, in accordance with IPRU-INV 5.3.2R, a firm must hold its liquid capital in financial resources as follows:

ICR

realisable within 12 months; and

CS

realisable within 30 days

LR 13.7.1RRP
(1) A circular relating to a resolution proposing to give the company authority to purchase its own equity securities must also include:(a) if the authority sought is a general one, a statement of the directors' intentions about using the authority;(b) if known, the method by which the company intends to acquire its equity shares and the number to be acquired in that way;(c) a statement of whether the company intends to cancel the equity shares or hold them in treasury;(d) if