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BIPRU TP 7 Pre CRD capital requirements applying on a solo basis during 2007: UCITS investment firms

1Application

7.1

R

This section applies to a BIPRU firm that:

(1)

is a UCITS investment firm; and

(2)

is applying BIPRU TP 3 (Use of IPRU on a solo basis during 2007).

Purpose of this section

7.2

G

BIPRU TP 3 (Pre CRD capital requirements applying on a solo basis during 2007) says that during 2007 a firm may apply the credit risk requirements of IPRU instead of the ones in BIPRU. For a UCITS investment firm this involves applying the credit risk requirements in chapter 7 of IPRU(INV). This section explains how this is done.

Duration of transitional

7.3

R

This section applies until 1 January 2008.

Drafting approach

7.4

G

Chapter 7 of IPRU(INV) does not contain any credit risk rules. Instead it cross refers to the ones in chapter 5 (Interim prudential requirements for former IMRO firms). Therefore this section applies BIPRU TP 6 (Pre CRD capital requirements applying on a solo basis during 2007: Investment management firms).

Parts of chapter 7 of IPRU(INV) that apply in 2007

7.5

R

The parts of chapter 7 of IPRU(INV) that do and do not apply during the period that BIPRU TP 3.4R applies are set out in BIPRU TP 7.7R.

7.6

G

The table in BIPRU TP 7.7R assumes that the firm is not applying the IRB approach. BIPRU TP 6.31R to BIPRU TP 6.34R (which are applied to a UCITS investment firm by BIPRU TP 7.8R) deal with a firm that does apply the IRB approach.

7.7

R

Table: Parts of chapter 7 of IPRU(INV) that apply in 2007

This table belongs to BIPRU TP 7.5R

Chapter 7 rule

A Y denotes that the provision does apply

An N denotes that it does not apply

Remarks

7.1.1 (Application)

N

BIPRU TP 7.1R applies instead

7.1.2 and 7.1.3 (Guidance on types of UCITS management companies etc)

Y

7.2.1 (General rule about financial resources and financial resources requirements)

N

7.2.2 (Financial resources requirement)

N

7.2.3 (Liquid capital resource requirement)

13/52 annual audited fixed expenditure requirement

N

Provision of paragraph (2) that says that requirements apply in respect of designated investment business other than when undertaking scheme management activity

Y

Position risk requirement

N

Counterparty risk requirement

Y

Foreign exchange requirement

N

Other assets requirement

Y

7.2.4 to 7.2.5 (Calculation of annual expenditure)

N

7.3 (Method of calculation of financial resources)

N

GENPRU 2.2 (Capital resources) applies instead

7.4.1 (Application of rules in chapter 5 of IPRU(INV) about qualifying subordinated loans etc)

N

The record keeping rules referred to in rule 7.4.1(1)(c) are applied under BIPRU TP 23 (Record keeping transitionals)

7.4.2 (Application of rules in chapter 5 of IPRU(INV) about large exposures)

Y

7.5 (Financial notification)

N

7.6 (Records)

N

Applied under BIPRU TP 23 (Record keeping transitionals)

Application of BIPRU TP 6

7.8

R

BIPRU TP 6 (Pre CRD capital requirements applying on a solo basis during 2007: Investment management firms) applies for the purposes of this section.