Related provisions for BIPRU 12.7.9
21 - 40 of 238 items.
(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.
11If the process of applying for admission of securities is likely to be very onerous due to the frequent or irregular nature of allotments and if no prospectus or listing particulars are required for the securities, an applicant may apply for a block listing of a specified number of the securities.
The grant of a block listing constitutes admission to listing for the securities that are the subject of the block. Separately, the provisions of article 1(4) of the Prospectus Regulation2 will need to be considered by the applicant when the securities that are the subject of the block listing are being issued.1
(1) An applicant applying for admission to listing by way of a block listing must notify an RIS of the number and type of securities that are the subject of the block listing application and the circumstances of their issue.(2) The notification in paragraph (1) must be made by 9 a.m. on the day the FCA is to consider the application.
Every six months the applicant must notify a RIS of the details of the number of securities covered by the block listing which have been allotted in the previous six months, using the Block Listing Six Monthly Return.1Note: A copy of the Block Listing Six Monthly Return can be found on the Primary Markets3 section of the FCA website.
(1) 1The FCA may suspend, with effect from such time as it may determine, the listing of any securities if the smooth operation of the market is, or may be, temporarily jeopardised or it is necessary to protect investors. [Note: article 18(1) CARD](2) An issuer that has the listing of any of its securities suspended must continue to comply with all listing rules applicable to it.(3) If the FCA suspends the listing of any securities, it may impose such conditions on the procedure
Examples of when the FCA may suspend the listing of securities include (but are not limited to) situations where it appears to the FCA that:(1) the issuer has failed to meet its continuing obligations for listing; or(2) the issuer has failed to publish financial information in accordance with the listing rules; or(3) the issuer is unable to assess accurately its financial position and inform the market accordingly; or(4) there is insufficient information in the market about a
Examples of when the FCA may cancel the listing of securities include (but are not limited to) situations where it appears to the FCA that:(1) the securities are no longer admitted to trading as required by these rules; or(2) the issuer no longer satisfies its continuing obligations for listing, for example if the percentage of shares in public hands falls below 10% 13(the FCA may however allow a reasonable time to restore the percentage, unless this is precluded by the need to
LR 5.2.5 R (2) and (2A)11 will not apply where an issuer of securities11 notifies a RIS:444151(1) that the financial position of the issuer or its group is so precarious that, but for the proposal referred to in LR 5.2.7 R (2), there is no reasonable prospect that the issuer will avoid going into formal insolvency proceedings;(2) that there is a proposal for a transaction, arrangement or other form of reconstruction of the issuer or its group which is necessary to ensure the
An issuer that wishes the FCA to cancel the listing of listed securities (other than securities11 with a premium listing41) must notify a RIS, giving at least 20 business days notice of the intended cancellation but is not required to obtain the approval of the holders of those securities contemplated in LR 5.2.5 R (2) or (2A)11.15144
(1) An issuer'ssecurities 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 without delay if it has:(a) requested a RIE to admit or re-admit any of its listed securities to trading; or(b) requested a RIE to cancel or suspend trading of any of its listed securities; or(c) been informed by a RIE that the trading of any of its listed securities will be cancelled or suspended.
An issuer that meets the following criteria is not required to comply with LR 17.3.4 R:(1) The issuer is an issuer of asset backed securities and would if it were a debt issuer to which DTR 4 applied be relieved of the obligations to draw up and publish annual and 3 half yearly financial reports in accordance with DTR 4.4.2 R provided the issuer is not otherwise required to comply with any other requirement for the publication of annual reports and accounts.1133(2) (a) the issuer:(i)
An issuer must ensure that any circular it issues to holders of its listed securities about proposed amendments to a trust deed includes:(1) an explanation of the effect of the proposed amendments; and(2) either the full terms of the proposed amendments, or a statement that they will be available for inspection:(a) [deleted]7(b) at the place of the general meeting for at least 15 minutes before and during the meeting; and7(c) on the national storage mechanism.7
(1) An issuer must ensure that any circular it issues to holders of its listed securities relating to a resolution proposing to redeem listed securities before their due date for redemption includes:(a) an explanation of the reasons for the early redemption;(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) a statement of any
An issuer must ensure that any definitive document of title for a security (other than a bearer security) includes the following matters on its face (or on the reverse in the case of paragraph (5)):(1) the authority under which the issuer 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 right-hand corner);(3) a footnote
Except where the purchases will
consist of individual transactions made in accordance with the terms of issue
of the relevant securities,
where1 a listed
company intends to purchase any of its securities convertible
into its equity shares2 with
a premium listing2 it must:1(1) ensure that no dealings in the
relevant securities are carried
out by or on behalf of the company or
any member of its group until
the proposal has either been notified to a RIS or
abandoned; and(2) notify
Any purchases, early redemptions or cancellations
of a company's own securities convertible
into equity shares with a premium listing,2 by or on behalf of the company or any other member of its group must be notified to a RIS when an aggregate of 10% of the initial
amount of the relevant class of securities has been purchased, redeemed
or cancelled, and for each 5% in aggregate of the initial amount of that class acquired thereafter.2
The notification required by LR 12.5.2 R must be made as soon as possible and in any event no later than
7:30 a.m. on the business day following
the calendar day on which the relevant threshold is reached or exceeded. The
notification must state:(1) the amount of securities acquired,
redeemed or cancelled since the last notification; and(2) whether or not the securities are to be cancelled and the number
of that class of securities that remain outstanding.
In the FCA's view, the 'realisation' of an investment means converting an asset into cash or money. The FCA does not consider that 'in specie' redemptions (in the sense of exchanging shares or securities of BC with other shares or securities) will generally count as realisation. Section 236(3)(a) refers to the realisation of an investment, the investment being represented by the 'value' of shares or securities held in BC. In the FCA's view, there is no realisation of value where
The most typical means of realising BC's shares or securities will be by their being redeemed or repurchased, whether by BC or otherwise. There are, of course, other ways in which a realisation may occur. However, the FCA considers that these will often not satisfy all the elements of the definition of an open-ended investment company considered together. For example, the mere fact that shares or securities may be realised on a market will not meet the requirements of the 'satisfaction
The use of an expectation test ensures that the definition of an open-ended investment company is not limited to a situation where a holder of shares in, or securities of, a body corporate has an entitlement or an option to realise his investment. It is enough if, on the facts of any particular case, the reasonable investor would expect that he would be able to realise the investment. The following are examples of circumstances in which the FCA considers that a reasonable investor
However, a reasonable investor's expectation of being able to realise his investment is not displaced simply because, in certain circumstances, no active steps need to be taken to realise the investment. This might happen where a redemption or repurchase of shares or securities may become compulsory as a result of some aspect of the applicable law.
Similarly, if BC issues shares or securities on different terms as to the period within which they are to be redeemed or repurchased (see PERG 9.6.4 G (The investment condition (section 236(3) of the Act): general), BC must be considered as a whole. Whether or not the expectation test is satisfied in relation to a particular body corporate is bound to involve taking account of the terms on which its shares or securities, or classes of shares or securities, are issued. But this
A number of controls apply under the Act to the promotion of shares or securities that are issued by any body corporate. These controls differ according to whether the person making the promotion is an unauthorised person (see PERG 9.10.2 G) or an authorised person (see PERG 9.10.3 G to PERG 9.10.6 G). In addition, where a body corporate is not an open-ended investment company:(1) the requirements of Prospectus Rules relating to the publication of an approved prospectus may1 apply
The controls under the Act that apply to promotions of shares or securities by unauthorised persons are in section 21 of the Act (Restrictions on financial promotion). These controls apply where an unauthorised person makes a financial promotion in, or from, the United Kingdom that relates to the shares in or securities of any body corporate. The same controls apply regardless of whether the shares or securities being promoted are issued by a body corporate that is an open-ended
Promotions made by authorised persons in the United Kingdom are generally subject to the controls inCOBS 4 (Communicating with clients, including financial promotions).3 However, in the case of shares in, or securities of, a body corporate which is an open-ended investment company, additional controls are imposed by Chapter II of Part XVII of the Act (Restrictions on promotion of collective investment schemes) (see PERG 8.20). Section 238 of the Act (Restrictions on promotion)
In the Regulated Activities Order, shares in or securities of an open-ended investment company are treated differently from shares in other bodies corporate. They are treated as units in a collective investment scheme under article 81 of the Regulated Activities Order (Units in a collective investment scheme) rather than shares under article 76 (Shares etc).
In order to be authorised, a person must have permission to carry on the regulated activities in question. What the permission needs to cover may differ according to whether the regulated activity being carried on relates to units or shares. So, for example, a body corporate that is an open-ended investment company will need permission if it carries on the regulated activity of dealing as principal or agent, arranging (bringing about) or making arrangements with a view to transactions
(1) For the recognition of receivables as collateral the requirements in this paragraph must be met.(2) The legal mechanism by which the collateral is provided must be robust and effective and ensure that the lender has clear rights over the proceeds.(3) A firm must take all steps necessary to fulfil local requirements in respect of the enforceability of security interests. There must be a framework which allows the lender to have a first priority claim over the collateral subject
(1) Where the requirements set out in this paragraph are met, exposures arising from transactions whereby a firm leases property to a third party must be treated the same as loans collateralised by the type of property leased.(2) For the exposures arising from leasing transactions to be treated as collateralised by the type of property leased, the following conditions must be met:(a) the conditions set out or referred to in BIPRU 4.10.13 R or BIPRU 4.10.18 R as appropriate for
(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
1This
chapter applies to an issuer that
has applied for the admission of:(1) securities specified
in article 1(2) of the Prospectus Regulation3 (other
than securities specified in
article 1(2)(a), (b)5 or (d) of that regulation3); or(2) any other specialist
securities for which a prospectus is
not required under the Act or the Prospectus Regulation24.
An issuer must
ensure that listing particulars for securities referred to in LR 4.1.1 R are approved by the FCA and published in accordance with LR 4.3.5 R.Note:
Under LR 2.2.11 R,
the securities will only be listed if listing
particulars for the securities have
been approved by the FCA and published.
An applicant for admission must apply to the FCA by:(1) submitting, in final form:(a) the documents described in LR 3.3 in the case of an application in respect of equity shares;44(b) the documents described in LR 3.4 in the case of an application in respect of debt securities or other securities;(c) the documents described in LR 3.5 in the case of a block listing;(2) submitting all additional documents, explanations and information as required by the FCA;(3) submitting verification
Where a UK RIE proposes to admit to trading (or to cease to admit to trading) by means of its facilities:(1) a specified investment (other than a security or an option in relation to a security); or(2) a type of security or a type of option in relation to a security; it must give the FCA3notice of that event, and the information specified for the purposes of this rule in REC 3.14.6 R to the FCA3, at the same time as that proposal is first formally communicated to its members or
Where a UK recognised body proposes to provide (or to cease to provide) clearing facilitation services3 in respect of:3(1) a specified investment (other than a security or an option in relation to a security); or (2) a type of security or a type of option in relation to a security;it must give the FCA3notice of that event and the information specified for the purposes of this rule in REC 3.14.6 R, at the same time as that proposal is first formally communicated to its members
Securities falling within the same article in Part III of the Regulated Activities Order which may be given the same generic description (for example, shares admitted to the UKofficial list) will normally be regarded as being of the same type. Options in relation to the same type of security will normally be regarded as being options of the same type.
The FCA3does not need to be notified of proposals to offer (or to withdraw offers of) safeguarding and administration services for individual assets of the same type. Specified investments (other than securities) falling within the same article in Part III of the Regulated Activities Order will normally be regarded as being of the same type. Securities falling within the same article in Part III of the Regulated Activities Order which may be given the same generic description
(1) This section covers techniques relating to transferable securities and approved money-market instruments which are used for the purpose of efficient portfolio management. It3 permits the generation of additional income for the benefit of the authorised fund, and hence for its investors, by entry into stock lending transactions for the account of the authorised fund.(2) The specific method of stock lending permitted in this section is in fact not a transaction which is a loan
(1) An ICVC, or the depositary of an authorised fund acting in accordance with the instructions 6of the authorised fund manager4, may enter into a repo contract, or a1stock lending arrangement of the kind described in section 263B of the Taxation of Chargeable Gains Act 1992 (without extension by section 263C), but only if:444(a) all the terms of the agreement under which securities are to be reacquired by the depositary for the account of the ICVC, AUT or ACS4 are in a form which
Where a stock lending arrangement is entered into, the scheme property remains unchanged in terms of value. The securities transferred cease to be part of the scheme property, but there is obtained in return an obligation on the part of the counterparty to transfer back equivalent securities. The depositary will also receive collateral to set against the risk of default in transfer, and that collateral is equally irrelevant to the valuation of the scheme property (because it is
(1) Collateral is adequate for the purposes of this section only if it is:(a) transferred to the depositary or its agent;(aa) 6for a UCITS scheme, received under a title transfer arrangement;(ab) 6for a UCITS scheme, at all times equal in value to the market value of the securities transferred by the depositary plus a premium;(b) for a non-UCITS retail scheme, at all times 6at least equal in value 6to the value of the securities transferred by the depositary; and(c) for a non-UCITS
LR 3.4.4 R to LR 3.4.6 R1 apply to an applicant that is seeking admission of any of the following types of securities:1(1) debt securities;(2) asset-backed securities;(3) certificates representing certain securities;2(4) [deleted]11(5) convertible securities;21(6) miscellaneous securities; and2(7) preference shares that are specialist securities.2
An applicant must submit, in final form, to the FCA by midday two business days before the FCA is to consider the application41(1) a completed Application for Admission of Securities to the Official List;(2) the prospectus or listing particulars that has been approved by the FCA;64(3) any approved supplementary prospectus or approved supplementary listing particulars, if applicable; 611(4) written confirmation of the number of securities to be issued (pursuant to a board resolution).
11If confirmation of the number of securities to be issued pursuant to a board resolution cannot be submitted to the FCA by the deadline set out in LR 3.4.4 R or, the number of securities to be admitted is lower than the number notified under LR 3.4.4 R, written confirmation of the number of securities to be issued or admitted must be provided to the FCA by the applicant at least one hour before the admission to listing is to become effective.
An issuer of securities other than shares admitted to trading on a regulated market must disclose to the public without delay any changes in the rights of holders of securities other than shares, including changes in the terms and conditions of such securities which could indirectly affect those rights, resulting in particular from a change in loan terms or in interest rates.[Note article 16(2) of the TD]
For the purpose of satisfying BIPRU 12.2.8R, a firm to which this section applies may include in its liquid assets buffer only:11(1) high quality debt securities issued by a government or central bank;(2) securities issued by a designated multilateral development bank;(3) reserves in the form of sight deposits with a central bank of the kind specified in BIPRU 12.7.5R and BIPRU 12.7.6R; and(4) in the case of a simplified ILAS BIPRU firm only, investments in a designated money
3For the purpose of BIPRU 12.7.2R (2), a firm may not include securities issued by a designated multilateral development bank unless:(1) the designated multilateral development bank in question has been assessed by at least two eligible ECAIs as having a credit rating associated with credit quality step 1 in the table set out in BIPRU 12 Annex 1R (Mapping of credit assessments of ECAIs to credit quality steps);4 and4(2) those securities are denominated in any of Canadian dollars,
(1) 2For the purposes of BIPRU 12.7.9R (2)(b) the requirements are that:(a) the securities are in excess of the amount of collateral required to be held by that central bank; and(b) the firm is entitled to regain legal title to such securities without any encumbrance.(2) The firm may only count securities that meet the requirements of BIPRU 12.7.9 R and BIPRU 12.7.9AR (1) from the point in time when the firm would regain legal title to the securities from the central bank, subsequent
Article 67 refers to an investment which is permitted to be traded or dealt in on a relevant market. In the FCA's opinion, this includes a situation where a class of securities is traded on a relevant market but the financial promotion relates to new securities of that class which have not yet themselves been issued or started trading. Where securities of that class have not yet been admitted to trading on a relevant market, article 68 may apply – see PERG 8.21.16 G.
Article 68 applies where the financial promotion relates to securities which have not yet been admitted to trading but for which application has been or is to be made. It exempts a non-real time or a solicited real-time financial promotion which a relevant EEA market requires to be communicated before admission to trading can be granted. A relevant EEA market for this purpose is a market with its head office in an EEA State and which meets the conditions in Part I of5 Schedule
In the FCA's opinion, companies whose securities are permitted to be traded or dealt in on a relevant market should be able to make good use of the article 69 exemption. But such companies will need to ensure that they meet the specific requirements in article 69(3). In very general terms, a financial promotion will comply with these requirements if:1(1) the only reason it is a financial promotion is that it contains or is accompanied by1 an inducement about certain investments
Article 702 applies to a non-real time financial promotion included in:2(1) listing particulars1; or21(2) supplementary listing particulars1; or21(3) a prospectus or supplementary prospectus approved in line with Prospectus Rules – including part of such a prospectus or supplementary prospectus; or7162221(4) any other document required or permitted to be published by listing rules or Prospectus Rules.171Article 70 also applies to a non-real time financial promotion comprising
If BC comes within the definition of a collective investment scheme, the third element in determining whether it is an open-ended investment company is whether the 'investment condition' is satisfied. This condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme:(1) expect that he would be able to realise his investment in the scheme, within a period appearing to him to be reasonable; his investment would be represented, at any
Section 236(3) of the Act states clearly that the investment condition must be met 'in relation to BC'. In the FCA's view, this means that the investment condition should not be applied rigidly in relation to specific events such as particular issues of shares or securities or in relation to particular points in time. The requirements of the investment condition must be satisfied in relation to the overall impression of the body corporate itself, having regard to all the circ
In the FCA's view, and within limits, the investment condition allows for the possibility that a body corporate that is an open-ended investment company may issue shares or securities with different characteristics. Some shares or securities may clearly satisfy the condition whereas others may not. The FCA considers that a reasonable investor contemplating investment in such a body corporate may still take the view, looking at the body corporate overall, that the investment condition
Certain matters are to be disregarded in determining whether the investment condition is satisfied. Section 236(4) of the Act states that, for these purposes, no account is to be taken of any actual or potential redemption or repurchase of shares or securities under:(1) Chapters 3 to 71 of Part 181 of the Companies Act 2006;1or1(2) [deleted]11(3) [deleted]2(4) provisions in force in a country or territory 2 which the Treasury has, by order, designated as corresponding provisions
BIPRU 7.2.3R(1) includes a trading bookposition in debt security, preference share or convertible that is subsequently repo'd under a repurchase agreement or lent under a stock lending agreement. Clearly, if the security had initially been obtained via a reverse repurchase agreement or stock borrowing agreement, the security would not have been included in the PRR calculation in the first place.
Futures, forwards or synthetic futures on a single debt security must be treated as follows:(1) a purchased future, synthetic future or forward is treated as:(a) a notional long position in the underlying debt security (or the cheapest to deliver (taking into account the conversion factor) where the contract can be satisfied by delivery of one from a range of securities); and(b) a notional short position in a zero coupon zero-specific-risk security with a maturity equal to the
A firm may net a short notional position in the cheapest to deliver security arising from a short future or forward (see BIPRU 7.2.13R(2)(a)) under which the seller has a choice of which debt security it may use to settle its obligations against a long position in any deliverable security up to a maximum of 90% of the common nominal amounts. The residual long and short nominal amounts must be treated as separate long and short positions.
A debt security issued by a non-qualifying issuer must receive a specific risk position risk adjustment of 8% or 12% according to the table in BIPRU 7.2.44R. However a firm must apply a higher specific risk position risk adjustment to such a debt security and/or not recognise offsetting for the purposes of defining the extent of general market risk between such a security and any other debt securities to the extent that doing otherwise would not be a prudent treatment of specific