Related provisions for GENPRU 3.1.6
1 - 12 of 12 items.
1(1) Unless otherwise stated,8GENPRU 3.1 applies to every firm that is a member of a financial conglomerate other than:(a) [deleted]10(b) [deleted]10(c) [deleted]10(d) an ICVC;8(e) a bank;8(f) a designated investment firm; and8(g) an insurer.8(1A) GENPRU 3.1 (except GENPRU 3.1.5R to GENPRU 3.1.12G10) applies to each of the following firms that is a member of a financial conglomerate:8(a) a bank;8(b) a designated investment firm; and8(c) an insurer that is a “UK Solvency II firm”
(1) In general the process in (2) to (8) applies for identifying financial conglomerates.(2) The relevant competent authority that has10 authorised regulated entities should try to identify any consolidation group that is a financial conglomerate. If a competent authority is of the opinion that a regulated entity authorised by that competent authority is a member of a consolidation group which may be a financial conglomerate it should communicate its view to the other competent
A lead supervisor (called the coordinator) is appointed for each financial conglomerate. The definition of coordinator in the Financial Groups Directive Regulations10 describes the criteria for deciding which competent authority is appointed as coordinator. 10[Note: Article 10 and 11 of the Financial Groups Directive]10
(1) This rule applies for the purpose of the definition of financial conglomerate and the financial conglomerate definition decision tree.(1A) [deleted]118(2) Any mixed financial holding company is considered to be outside the overall financial sector for the purpose of the tests set out in the boxes titled Threshold Test 1, Threshold Test 2 and Threshold Test 3 in the financial conglomerate definition decision tree.(3) Determining whether the tests set out in the boxes titled
Once a financial conglomerate has become a financial conglomerate and subject to supervision in accordance with this chapter10, the figures in the financial conglomerate definition decision tree are altered as follows:(1) the figure of 40% in the box titled Threshold Test 1 is replaced by 35%;(2) the figure of 10% in the box titled Threshold Test 2 is replaced by 8%; and(3) the figure of six billion Euro in the box titled Threshold Test 3 is replaced by five billion Euro.
The alteration in GENPRU 3.1.9 R only applies to a financial conglomerate during the period that:(1) begins when the financial conglomerate would otherwise have stopped being a financial conglomerate because it does not meet one of the unaltered thresholds referred to in GENPRU 3.1.9 R; and(2) covers the three years following that date.
The calculations referred to in the financial conglomerate definition decision tree regarding the balance sheet must be made on the basis of the aggregated balance sheet total of the members of the consolidation group, according to their annual accounts. For the purposes of this calculation, undertakings in which a participation is held must be taken into account as regards the amount of their balance sheet total corresponding to the aggregated proportional share held by the consolidation
Regulation 16 to 20, 21 and 24 of the financial groups directive regulations10 allow competent authorities, on a case by case basis, to:(1) change the definition of financial conglomerate and the obligations applying with respect to a financial conglomerate (which would include, where the appropriate regulator would be the coordinator under GENPRU 3.1.3G (6), permitting firms to apply, on an annual basis and subject to publication and notification to the competent authority10,
4GENPRU 3.1.29 R4 to GENPRU 3.1.31 R and GENPRU 3 Annex 1 apply10 the detailed capital adequacy requirements that correspond with10 the Financial Groups Directive. They only deal with a financial conglomerate for which the FCA8 is the coordinator. If another competent authority is coordinator of a financial conglomerate, those rules do not apply with respect to that financial conglomerate and instead that coordinator will be responsible for implementing those detailed requir
Annex I of the Financial Groups Directive laid10 down three5 methods for calculating capital adequacy at the level of a financial conglomerate. Those three5 methods are as follows:55(1) Method 1 calculates capital adequacy using accounting consolidation. It is set out in 11GENPRU 3.1.29 R to GENPRU 3.1.31 R and Part 1 of GENPRU 3 Annex 1.(2) Method 2 calculates capital adequacy using a deduction and aggregation approach. It is set out in 11GENPRU 3.1.29 R to GENPRU 3.1.31 R and
Paragraph 5.7 of GENPRU 3 Annex 1 (Capital adequacy calculations for financial conglomerates) deals with a case in which there are no capital ties between entities in a financial conglomerate. In particular, the FCA8 , after consultation with the other competent authority10 and in accordance with this chapter10, will determine which proportional share of a solvency deficit in such an entity will have to be taken into account, bearing in mind the liability to which the existing
The5 method to be applied may be5 decided by the coordinator after consultation with the other competent authority10 and the financial conglomerate itself. Where the FCA8 acts as coordinator, the financial conglomerate itself may choose which of Method 1 or Method 2 10it will apply, unless the firm is subject to a requirement obliging the firm to apply a particular method.555
(1) A firm that is a member of a financial conglomerate must at all times have capital resources of such an amount and type that results in the capital resources of the financial conglomerate taken as a whole being adequate.(2) This rule does not apply with respect to any financial conglomerate until notification has been made that it has been identified as a financial conglomerate as contemplated by regulation 2 of the Financial Groups Directive Regulations.10
If,5 with respect to a firm and a financial conglomerate of which it is a member, this rule applies under GENPRU 3.1.29A R5 to the firm with respect to that financial conglomerate as described in GENPRU 3.1.30 R, the firm must at all times have capital resources of an amount and type that ensures that the conglomerate capital resources of that financial conglomerate at all times equal or exceed its conglomerate capital resources requirement.5
5GENPRU 3.1.29 R applies to a firm with respect to the financial conglomerate of which it is a member if notification has been made in accordance with regulation 2 of the Financial Groups Directive Regulations that the financial conglomerate is a financial conglomerate and that the FCA8 is coordinator of that financial conglomerate.
If GENPRU 3.1.29 R (application of Method 1 or 210) applies to a firm with respect to the financial conglomerate of which it is a member, then with respect to the firm and the financial conglomerate:5(1) the definitions of conglomerate capital resources and conglomerate capital resources requirement that apply for the purposes of that rule are the ones from whichever of Part 1 or Part 2 of GENPRU 3 Annex 1 the firm has indicated to the FCA8 it will apply, unless the firm is subject
If GENPRU 3.1.29 R (application of Method 1 or 210) applies to a firm with respect to a financial conglomerate of which it is a member, and the firm is subject to a requirement obliging the firm to apply a specific part of GENPRU 3 Annex 1,5 the definitions of conglomerate capital resources and conglomerate capital resources requirement that apply for the purposes of that rule are the ones from whichever of Part 1 or5 Part 2 of GENPRU 3 Annex 1 is specified in the requirement
GENPRU 3.1.35 R implements requirements that correspond to10 Article 7(4) and Article 8(4) of the Financial Groups Directive10 that where a financial conglomerate is headed by a mixed financial holding company, the sectoral rules regarding risk concentration and intra-group transactions of the most important financial sector in the financial conglomerate, if any, shall apply to that sector as a whole, including the mixed financial holding company.
Subject to GENPRU 3.1.35AR, a 11firm must ensure that the sectoral rules regarding risk concentration and intra-group transactions of the most important financial sector in the financial conglomerate referred to in GENPRU 3.1.34 R are complied with with respect to that financial sector as a whole, including the mixed financial holding company. The sectoral rules for these purposes are those identified in the table in GENPRU 3.1.36 R.4
Table: application of sectoral rules
This table belongs to GENPRU 3.1.35 R
The most important financial sector |
Applicable sectoral rules |
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Risk concentration |
Intra-group transactions |
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11For the Banking sector |
3444 | 11The UK CRR and the PRA Rulebook 43444 |
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11For the investment services sector |
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PRA Rulebook7: Solvency II Firms Group Supervision 16.18 7 |
PRA Rulebook: Solvency II Firms: Groups: 16.28 7 |
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Note |
Any waiver, approval or permission8 granted to a member of the financial conglomerate, on an individual 11or consolidated basis, shall not apply in respect of the financial conglomerate for the purposes of GENPRU 3.1.36 R. For this purpose, “permission” refers to a consent, approval or agreement conferred on the appropriate regulator as competent authority11. 9898 |
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(1) 10This rule deals with the inclusion of an asset management company or an alternative investment fund manager5 that is a member of a financial conglomerate in the scope of regulation of financial conglomerates.[Note: Articles 30 and 30a of the Financial Groups Directive]1055555(2) An asset management company or an alternative investment fund manager5 is in the overall financial sector and is a regulated entity for the purpose of:(a) 5GENPRU 3.1.29 R5 to GENPRU 3.1.36 R;(b)
(1) A firm that is a regulated entity must establish whether or not any consolidation group of which it is a member:(a) is a financial conglomerate; or(b) has ceased to be a financial conglomerate;if:(c) the firm believes; or(d) a reasonable firm that is complying with the requirements of the regulatory system would believe;that it is likely that (a) or (b) is true.(2) A firm does not need to determine whether (1)(a) is the case if the consolidation group is already being regulated
A firm does not have to give notice to the FCA2 under SUP 15.9.1 R if it or another member of the consolidation group has already given notice of the relevant fact to:55(1) the FCA2 or55(2) (if another competent authority is co-ordinator of the financial conglomerate ) that competent authority; or(3) (in the case of a financial conglomerate that does not yet have a co-ordinator ) the competent authority who would be co-ordinator under Regulation 1(2) of the Financial Groups
(1) 3A firm must, at the level of the financial conglomerate in the United Kingdom4, regularly provide the FCA2 with details on the financial conglomerate's legal structure and governance and organisational structure, including all regulated entities , and non-regulated subsidiaries4.(2) A firm must disclose publicly, at the level of the financial conglomerate in the United Kingdom4, on an annual basis, either in full or by way of references to equivalent information, a description
If the Part 4A permission of a firm contains a requirement obliging it to comply with this rule with respect to a third-country financial conglomerate of which it is a member, it must comply, with respect to that third-country financial conglomerate, with the rules in Part 1 of GENPRU 3 Annex 2, as adjusted by Part 3 of that annex.
If the Part 4A permission of a firm contains a requirement obliging it to comply with this rule with respect to a third-country banking and investment group of which it is a member, it must comply, with respect to that third-country banking and investment group, with the rules in Part 2 of GENPRU 3 Annex 2, as adjusted by Part 3 of that annex.
Except as set out in SYSC 12.1.4 R, this section applies with respect to different types of group as follows:(1) SYSC 12.1.8 R and SYSC 12.1.10 R apply with respect to all groups, including 17financial conglomerates and groups dealt with in SYSC 12.1.13 R to 12SYSC 12.1.15 R12;1919(2) the additional requirements set out in SYSC 12.1.11 R and SYSC 12.1.12 R only apply with respect to a financial conglomerate of which notification has been made that it has been identified as a
(1) This rule applies in respect of the following rules:(a) SYSC 12.1.8R (2);(b) SYSC 12.1.10R (1), so far as it relates to SYSC 12.1.8R (2);(c) SYSC 12.1.10R (2); and(d) SYSC 12.1.11 R to SYSC 12.1.15 R.(2) The rules referred to in (1):(a) only apply with respect to a financial conglomerate if it is a financial conglomerate of which notification has been made that it has been identified as a financial conglomerate as contemplated by regulation 2 of the Financial Groups Directive
Where this section applies with respect to a financial conglomerate, the risk management processes referred to in SYSC 12.1.8R (2) or, for a Solvency II firm, the risk management system referred to in the PRA Rulebook: Solvency II firms: Conditions Governing Business, rule 3,12 must include:(1) sound governance and management processes, which must include the approval and periodic review by the appropriate managing bodies within the financial conglomerate of the strategies and
Where this section applies with respect to a financial conglomerate, the internal control mechanisms referred to in SYSC 12.1.8R (2) or, for a Solvency II firm, the internal control system referred to in the PRA Rulebook: Solvency II firms: Conditions Governing Business, rule 3,12 must include:(1) mechanisms that are adequate to identify and measure all material risks incurred by members of the financial conglomerate and appropriately relate capital in the financial conglomerate
1The effect of SUP 16.1.1 R is that this section applies to every firm carrying on business set out in column (1) of SUP 16.12.4 R except:(1) [deleted]812(1A) [deleted]8132(2) an oil market participant that is not subject to the requirements of IPRU(INV) Chapter 32;(3) an authorised professional firm (other than one that must comply with IPRU(INV) 3, 5 or 13 in accordance with IPRU(INV) 2.1.4R, or 80 that is a CASS debt management firm,47 where SUP 16.12.4 R will apply in respect
(1) Any firm permitted to 5carry5 on any of the activities within each of the RAGs set out in column (1) of the table in SUP 16.12.4 R must:(a) (i) unless (ii) or (iii) 11applies, submit to the FCA65 the duly completed data items or other items applicable to the firm as set out in the provision referred to in column (2) of that table;9696(ii) unless (iii) applies, where 11 a firm is required to submit completed data items for 11more than one RAG, that11firm must only submit the
(1) A firm that is a member of a financial conglomerate must submit financial reports to the FCA68 in accordance with the table in SUP 16.12.33 R if:9696(a) it is at the head of a financial conglomerate81; or9696(b) its Part 4A permission96 contains a relevant requirement.96(2) In (1)(b), a relevant requirement is one which:(a) applies SUP 16.12.33 R to the firm; or(b) applies SUP 16.12.33 R to the firm unless the mixed financial holding company of the financial conglomerate
Financial reports from a member of a financial conglomerate (see SUP 16.12.32 R)
Content of Report |
Form (Note 1) |
Frequency |
Due Date |
Calculation of supplementary capital adequacy requirements in accordance with one of the three42 technical calculation methods 42 |
Note 2 |
Note 5 Yearly42 |
Note 5 |
Identification of significant risk concentration levels |
Note 3 |
Yearly |
4 months after year end |
Identification of significant intra-group transactions |
Note 4 |
Yearly |
4 months after year end |
Report on compliance with GENPRU 3.1.35 R where it applies 11 |
Note 6 |
Note 5 |
Note 5 |
Note 1 |
When giving the report required, a firm must use the form indicated, if any. |
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Note 2 |
In respect of FCA-authorised persons, if39 Part 1 of GENPRU3 Annex 1 (method80 1), or Part 2 of GENPRU 3 Annex 1 (method 2), or Part 3 of GENPRU 3 Annex 1 (method 3) applies, there is no specific form. Adequate information must be provided, specifying the calculation method used42 and each financial conglomerate for which the FCA68 is the co-ordinator must discuss with the FCA68 the form which this reporting will take and the extent to which verification by an auditor will be required.42 1168429696969642 |
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| 42 | |||
| 42 | |||
| 7942424242 | |||
Note 3 |
Rather than specifying a standard format for each financial conglomerate to use, each financial conglomerate for which the FCA68 is the co-ordinator must discuss with the FCA68 the form of the information to be reported. This should mean that usual information management systems of the financial conglomerate can be used to the extent possible to generate and analyse the information required. When reviewing the risk concentration levels, the FCA68 will in particular monitor the possible risk of contagion in the financial conglomerate, the risk of a conflict of interests, the risk of circumvention of sectoral rules68, and the level or volume of risks. 969696969696 |
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Note 4 |
For the purposes of this reporting requirement, an intra-group transaction will be presumed to be significant if its amount exceeds 5% of the total amount of capital adequacy requirements at the level of the financial conglomerate. Rather than specifying a standard format for each financial conglomerate to use, each financial conglomerate for which the FCA68 is the co-ordinator must11 discuss with the FCA68 the form of the information to be reported. This should mean that the68 usual information management systems of the financial conglomerate can be used to the extent possible to generate and analyse the information required. When reviewing the intra-group transactions, the FCA68 will in particular monitor the possible risk of contagion in the financial conglomerate, the risk of a conflict of interest11, the risk of circumvention of sectoral rules, and the level or volume of risks. 96961196969696 |
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Note 5 |
The frequency and due date will be as follows: (1) banking and investment services conglomerate; frequency is yearly80 with due date 45 business days after period end;42 and68 (2) insurance conglomerate: frequency is yearly with due date four months after period end for the capital adequacy return and three months after period end for the report on compliance with GENPRU 3.1.35 R where it applies. 116811684242 |
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Note 6 |
Adequate information must be added as a separate item to the relevant form for sectoral reporting. |
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1If the appropriate regulator2, in the course of carrying on supplementary supervision of a financial conglomerate, is considering exercising its powers under section 138A2 of the Act (Modification or waiver of rules), regulation 4 of the Financial Groups Directive Regulations contains special provisions. The appropriate regulator2 must, in broad terms, do two things. Where required by those regulations, it must obtain the consent of the relevant competent authorities of the group.
If this chapter requires the submission of a report or data item13 covering a group, a single report or data item13 may be submitted, and so satisfy the requirements of all firms in the group. Such a report or data item13 should contain the information required from all of them, meet all relevant due dates and indicate all the firms on whose behalf it is submitted; if necessary a separate covering sheet should list the firms on whose behalf a report or data item13 is submitted.
1This section applies to every firm in the regulatory activity group (RAG) set out in column (1), which is a type of firm in column (2), of the tables in SUP 16.7A.3 R and SUP 16.7A.5 R, except:(1) [deleted]5(2) [deleted]5(3) an oil market participant that is not subject to the requirements of IPRU(INV) Chapter 3;(4) an authorised professional firm other than:(a) a firm that must comply with IPRU(INV) 3, 5 or 13 in accordance with IPRU(INV) 2.1.4R; or(b) a CASS debt management
1In most cases, where the FCA is concerned about the fitness and propriety of a specific individual, it may be more appropriate for the FCA to consider whether to make an order prohibiting the individual from performing functions in relation to exempt regulated activities rather than a disapplication order in relation to the member concerned. The criteria which the FCA will apply when determining whether to make a prohibition order against an individual who is not regulated by
2These Regulations implemented3 in part the Financial Conglomerates Directive,25 which imposed3 certain procedural requirements on the FCA as a competent authority under the Directive. These Regulations also made3 specific provision about the exercise of certain supervisory powers in relation to financial conglomerates. 25 Directive 2002/87/EC
In considering whether to grant (or consent to, as the case may be)27 a firm's application to vary its Part 4A permission or impose or vary a requirement, the regulator concerned will also have regard, under section 55R(1)27 of the Act (Persons connected with an applicant), to any person6 appearing to be, or likely to be, in a relationship with the firm which is relevant. The Financial Groups Directive Regulations make special consultation provisions where the regulator is exercising