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IPRU-INV 1.1 PURPOSE

IPRU-INV 1.1.1 R

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IPRU-INV 1.1.2 R

The rules and guidance in this sourcebook will assist the appropriate regulator to meet the statutory objectives. This sourcebook does so by setting minimal capital and other risk management standards thereby mitigating the possibility that firms will be unable to meet their liabilities and commitments to consumers and counterparties.

IPRU-INV 1.1.3 R

The general scheme of this sourcebook is, wherever appropriate, to apply the financial and other prudential standards which applied to a firm immediately prior to it becoming authorised by the appropriate regulator under the Act. For convenience, the chapter numbers adopted in this sourcebook correspond with those of the rulebooks of previous regulators.

IPRU-INV 1.1.3A R

1

This sourcebook does not apply to BIPRU firms1 except:

  1. (1)

    it does apply to certain exempt BIPRU commodities firms; and

  2. (2)

    [deleted]

IPRU-INV 1.1.3B R

1This sourcebook does not apply to IFPRU investment firms except it does apply to exempt IFPRU commodities firms.

IPRU-INV 1.1.4 R

This sourcebook does not apply to banks, building societies, insurers, the Society of Lloyd's (except in relation to underwriting agents), friendly societies and certain other categories of firm and members' advisers.

IPRU-INV 1.1.5 R

On becoming authorised by the appropriate regulator a firm will have to comply with the particular chapter of this sourcebook appropriate to its business. The firm will be able to seek guidance on this during the authorisation procedure. If subsequently, the business for which a firm has permission changes it may be necessary for it to comply with a different set of financial resources requirements. Firms will be able to discuss this aspect with the appropriate regulator during the application process.

IPRU-INV 1.1.6 R

The Supervision manual sets out provisions relating to the periodic reporting and notification of financial information to the appropriate regulator or to the auditing of accounts. However, this sourcebook contains a few additional notification requirements (notification rules).

IPRU-INV 1.2 APPLICATION

IPRU-INV 1.2.1 R

The Glossary applies to the transitional provisions, this chapter (IPRU-INV 1), IPRU-INV 2, IPRU-INV 4, IPRU-INV 6, IPRU-INV 11 and IPRU-INV 13.

IPRU-INV 1.2.2 R
  1. (1)

    IPRU-INV applies to:

    1. (a)

      a members' adviser;

    2. (b)

      an investment management firm;

    3. (c)

      a personal investment firm;

    4. (d)

      an authorised professional firm;

    5. (e)

      a securities and futures firm;

    6. (f)

      a service company;

    7. (g)

      the Society of Lloyd's (in relation to underwriting agents);

    8. (h)

      [deleted]

    9. (i)

      a credit union which is a CTF provider; and

    10. (j)

      an exempt CAD firm; and

    11. (k)

      a collective portfolio management firm; and

    12. (l)

      a collective portfolio management investment firm.

  2. (2)

    IPRU-INV does not apply to:

    1. (a)

      a lead regulated firm; or

    2. (b)

      a media firm; or

    3. (c)

      a BIPRU firm (unless it is an exempt BIPRU commodities firm); or.

    4. (d)

      an IFPRU investment firm (unless it is an exempt IFPRU commodities firm).

  3. (3)

    The definitions in the Glossary (which is applicable to the Handbook generally) apply to this chapter.

IPRU-INV 1.2.3 G

For the avoidance of doubt, IPRU-INV does not apply to any of the following:

  1. (a)

    a bank; or

  2. (b)

    a building society; or

  3. (ba)

    a designated investment firm; or

  4. (c)

    a friendly society; or

  5. (d)

    an ICVC; or

  6. (e)

    an incoming EEA firm or an incoming Treaty firm which does not have a top up permission; or

  7. (f)

    an insurer; or

  8. (g)

    a UCITS qualifier.

Obligation to Comply

IPRU-INV 1.2.4 R

A firm of a kind listed in the left-hand column of Table 1.2.4R must comply with the provisions of IPRU (INV) shown in the right hand column and, where relevant, the provisions of Chapter 14.

IPRU-INV 1.2.5 R

Table

This table belongs to IPRU (INV) 1.2.4R

Authorised professional firm

Chapters 1 and 2

Securities and futures firm (which is not a MiFID investment firm)

Chapters 1 and 3

Securities and futures firm (which is an exempt BIPRU commodities firm or an exempt IFPRU commodities firm)

Chapters 1 and 3

The Society of Lloyd's (in relation to underwriting agents) and members' advisers

Chapters 1 and 4

Investment management firm

Chapters 1 and 5

An exempt CAD firm or a local firm

Chapters 1 and 9

Service company

Chapters 1 and 6

Collective portfolio management firm

Chapters 1 and 11

Collective portfolio management investment firm

Chapters 1 and 11

Personal investment firm

Chapters 1 and 13

Credit union which is a CTF provider

Chapters 1 and 8

CAPITAL SUBSTITUTES: TRANSITIONAL PROVISION

IPRU-INV 1.2.6 G

The financial resource requirements of the Financial Services Act regulators permitted certain types of borrowings or facilities to be treated as part of a firm's capital resources. The most common example is that of a subordinated loan which met the relevant conditions. The following provisions permit firms to continue to use these borrowings or facilities in the same way as under the relevant previous regulator's rules, provided that certain conditions are met.

IPRU-INV 1.2.7 R
  1. (1)

    If a firm was, immediately before commencement permitted to treat "relevant funds" as part of its capital resources under the financial resource rules of a previous regulator applicable to the firm, it may treat those funds in an equivalent manner under the corresponding provisions of IPRU-INV, provided that the conditions in (3) are met.

  2. (2)

    For the purposes of this rule "relevant funds" are funds provided to the firm under the terms of

    1. (a)

      a subordinated loan agreement; or

    2. (b)

      qualifying undertaking; or

    3. (c)

      any other instrument treated in an equivalent manner under the financial resources rules applicable to the firm.

  3. (3)

    The conditions referred to in (1) are either:

    1. (a)

      in the case of a subordinated loan agreement, qualifying undertaking or other relevant instrument to which the firm'sprevious regulator is not party:

      1. (i)

        the parties to it treat all rights (including, without limitation, rights to notice) which the agreement, undertaking or instrument grants to the firm'sprevious regulator as having been granted to the appropriate regulator; and

      2. (ii)

        if there is a variation of the commercial terms the parties include, in the terms of the instrument executed to effect the variation, provision to substitute reference to the appropriate regulator in place of any reference to the firm'sprevious regulator; or

    2. (b)

      in the case of a subordinated loan agreement, qualifying undertaking or other relevant instrument to which the firm'sprevious regulator is party, the parties treat the rights accorded to the self regulating organisation under the relevant instrument as having been assigned to the appropriate regulator immediately before commencement.

IPRU-INV 1.2.8 G

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