BIPRU TP 18 Large exposures: Exemptions for intra-group exposures for building societies

1Application

18.1

R

This section applies to a building society.

18.2

R

This section does not apply to a building society that applies BIPRU TP 3 (Pre CRD capital requirements applying on a solo basis during 2007).

18.3

G

The reason for BIPRU TP 18.2 R is that BIPRU TP 18 reproduces (with amendments) part of the large exposures requirements of Volume 1 of IPRU(BSOC). If a firm applies BIPRU TP 3 (Pre CRD capital requirements applying on a solo basis during 2007) all the large exposure requirements of IPRU(BSOC) will apply. There is therefore no need to apply BIPRU TP 18 in these circumstances.

Purpose

18.4

G

This section reproduces, with amendments, paragraphs 7.5.1 to 7.5.3 of Chapter 7 of volume 1 of IPRU(BSOC). However it does not carry forward the 300% limit in paragraph 7.4.2(2) of that volume.

Duration of transitional

18.5

R

This section applies until 31 December 2009.

General rule

18.6

R

BIPRU 10.5.6 R (25% exposure limit) does not apply to an exposure of a building society to a subsidiary undertaking of the building society. Instead the building society must ensure that:

(1)

the total amount of its exposures to any single subsidiary undertaking within the building society's UK consolidation group or to any sub-group of such subsidiary undertakings does not exceed 20% of its capital resources; and

(2)

the total amount of its exposures to its subsidiary undertakings that are not within the building society's UK consolidation group does not exceed 20% of its capital resources.

18.7

G

Exposures to subsidiary undertakings still count towards the overall limit of 800% of capital resources as set out in BIPRU 10.5.8 R unless otherwise exempted.

Effect of BIPRU TP 18 on concentration risk exemptions in BIPRU 10

18.8

R

A building society must choose between applying this section to all its exposures to its subsidiary undertakings or to none of them.

18.9

R

If a building society applies this section, BIPRU 10.8 to BIPRU 10.10 (Integrated groups) do not apply.

18.10

G

If a firm applies this section, BIPRU 10.7 (Treasury concession and intra-group securities financing transactions) continues to apply.

Notification

18.11

R

BIPRU TP 17.18R to BIPRU TP 17.22R (Notification) apply to this section as they do to BIPRU TP 17 (Large exposures: Exemptions for intra-group exposures for banks and investment firms).

Consolidation

18.12

G

The application of this section on a consolidated basis is dealt with in BIPRU TP 19 (Large exposures: Exemptions for intra-group exposures on a consolidated basis).