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SUP App 2.5 Capital resources below required margin of solvency

SUP App 2.5.1R

Unless SUP App 2.5.3 R applies:

  1. (1)

    if a firm's capital resources are such that they no longer equal or exceed its required margin of solvency; or

  2. (2)

    if a firm no longer complies with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b)1, as applicable;

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it must, within 28 days of becoming aware of this event, submit to the FSA a plan for the restoration of a sound financial position, including:

  1. (3)

    a scheme of operations; and

  2. (4)

    an explanation of how, if at all, and by when:

    1. (a)

      it expects its capital resources to be restored to the required margin of solvency; or

    2. (b)

      as the case may be, it expects to comply with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b)1, as applicable.

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SUP App 2.5.2G

See SUP App 2.11.2 G for guidance on the period that the scheme of operations should cover.

SUP App 2.5.3R

If a firm:

  1. (1)

    falls into SUP App 2.5.1 R (1) or SUP App 2.5.1 R (2); and

  2. (2)

    it has previously submitted either a run-off plan in accordance with SUP App 2.8.1 R or a scheme of operations in accordance with SUP App 2.5.1 R;

it must, within 28 days of becoming aware that it falls into SUP App 2.5.1 R (1) or SUP App 2.5.1 R (2):

  1. (3)

    notify the FSA; and

  2. (4)

    submit a plan for restoration which:

    1. (a)

      explains why the firm's capital resources have fallen below its required margin of solvency or, as the case may be, it no longer complies with GENPRU 2.2.32 R or GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b)1, as applicable; and

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    2. (b)

      demonstrates how, if at all, and by when, the firm will restore it or, as the case may be, resume compliance with GENPRU 2.2.32 R and GENPRU 2.2.28 R, or INSPRU 6.1.45R (1)(a) and INSPRU 6.1.45R (1)(b)1, as applicable.

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