Related provisions for REC 3.14.9

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LR 10.1.3RRP
In this chapter (except where specifically provided to the contrary) a reference to a transaction by a listed company:(1) (subject to paragraphs (3),(4) and (5)) includes all agreements (including amendments to agreements) entered into by the listed company or its subsidiary undertakings;(2) includes the grant or acquisition of an option as if the option had been exercised except that, if exercise is solely at the listed company's or subsidiary undertaking's discretion, the transaction
LR 10.1.4GRP
This chapter is intended to cover transactions that are outside the ordinary course of the listed company's business and may change a security holder's economic interest in the company's assets or liabilities (whether or not the change in the assets or liabilities is recognised on the company's balance sheet).
LR 10.4.1RRP
(1) A listed company must notify a RIS as soon as possible after the terms of a class 2 transaction are agreed.(2) The notification must include:(a) details of the transaction, including the name of the other party to the transaction;(b) a description of the business carried on by, or using, the net assets the subject of the transaction;(c) the consideration, and how it is being satisfied (including the terms of any arrangements for deferred consideration);(d) the value of the
LR 10.4.2RRP
(1) A listed company must notify a RIS as soon as possible if, after the notification under LR 10.4.1 R, it becomes aware that:(a) there has been a significant change affecting any matter contained in that earlier notification; or(b) a significant new matter has arisen which would have been required to be mentioned in that earlier notification if it had arisen at the time of the preparation of that notification.(2) The supplementary notification must give details of the change
LR 10.2.7RRP
(1) A break fee or break fees payable in respect of a transaction are to be treated as a class 1 transaction if the total value of the fee or the fees in aggregateexceeds:(a) if the listed company is being acquired, 1% of the value of the listed company calculated by reference to the offer price; and(b) in any other case, 1% of the market capitalisation of the listed company.(2) For the purposes of paragraph (1)(a):(a) the 1% limit is to be calculated on the basis of the fully
LR 10.2.8RRP
If:(1) a major subsidiary undertaking of a listed company issues equity shares for cash or in exchange for other securities or to reduce indebtedness;(2) the issue would dilute the listed company's percentage interest in the major subsidiary undertaking; and(3) the economic effect of the dilution is equivalent to a disposal of 25% or more of the aggregate of the gross assets or profits (after the deduction of all charges except taxation) of the group;the issue is to be treated
BIPRU 7.7.7RRP
The general eligibility criteria for using the methods in BIPRU 7.7.4R and BIPRU 7.7.9R - BIPRU 7.7.11R, for CIUs issued by companies supervised or incorporated within the EEA are that:(1) the CIU's prospectus or equivalent document must include:(a) the categories of assets the CIU is authorised to invest in;(b) if investment limits apply, the relative limits and the methodologies to calculate them;(c) if leverage is allowed, the maximum level of leverage; and(d) if investment
BIPRU 7.7.11RRP
Where a firm is not aware of the underlying investments of the CIU on a daily basis, the firm may calculate the securities PRR for position risk (general market risk and specific risk) in accordance with the methods set out in the securities PRR requirements, subject to the following conditions:(1) it must be assumed that the CIU first invests to the maximum extent allowed under its mandate in the asset classes attracting the highest securities PRR for position risk (general market
MIPRU 4.4.2RRP

Table: Items which are eligible to contribute to the capital resources of a firm

Item

Additional explanation

1.

Share capital

This must be fully paid and may include:

(1)

ordinary share capital; or

(2)

preference share capital (excluding preference shares redeemable by shareholders within two years).

2.

Capital other than share capital (for example, the capital of a sole trader, partnership or limited liability partnership)

The capital of a sole trader is the net balance on the firm's capital account and current account. The capital of a partnership is the capital made up of the partners':

(1)

capital account, that is the account:

(a)

into which capital contributed by the partners is paid; and

(b)

from which, under the terms of the partnership agreement, an amount representing capital may be withdrawn by a partner only if:

(i) he ceases to be a partner and an equal amount is transferred to another such account by his former partners or any person replacing him as their partner; or

(ii) the partnership is otherwise dissolved or wound up; and

(2)

current accounts according to the most recent financial statement.

For the purpose of the calculation of capital resources, in respect of a defined benefit occupational pension scheme:

(1)

a firm must derecognise any defined benefit asset;

(2)

a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year.

3.

Reserves (Note 1)

These are, subject to Note 1, the audited accumulated profits retained by the firm (after deduction of tax, dividends and proprietors' or partners' drawings) and other reserves created by appropriations of share premiums and similar realised appropriations. Reserves also include gifts of capital, for example, from a parent undertaking.

For the purposes of calculating capital resources, a firm must make the following adjustments to its reserves, where appropriate:

(1)

a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on debt instruments held in the available-for-sale financial assets category;

(2)

a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on cash flow hedges of financial instruments measured at cost or amortised cost;

(3)

in respect of a defined benefit occupational pension scheme:

(a)

a firm must derecognise any defined benefit asset;

(b)

a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year.

4.

Interim net profits (Note 1)

If a firm seeks to include interim net profits in the calculation of its capital resources, the profits have, subject to Note 1, to be verified by the firm's external auditor, net of tax, anticipated dividends or proprietors' drawings and other appropriations.

5.

Revaluation reserves

6.

General/ collective provisions (Note 1)

These are provisions that a firm carrying on home financing1or home finance administration1holds against potential losses that have not yet been identified but which experience indicates are present in the firm's portfolio of assets. Such provisions must be freely available to meet these unidentified losses wherever they arise. Subject to Note 1, general/collective provisions must be verified by external auditors and disclosed in the firm's annual report and accounts.

1111

7.

Subordinated loans

Subordinated loans must be included in capital on the basis of the provisions in this chapter that apply to subordinated loans.

Note:

1

Reserves must be audited and interim net profits, general and collective provisions must be verified by the firm's external auditor unless the firm is exempt from the provisions of Part VII of the Companies Act 1985 (section 249A (Exemptions from audit)) or, where applicable, Part 16 of the Companies Act 2006 (section 477 (Small companies: Conditions for exemption from audit))2 relating to the audit of accounts. 2
MIPRU 4.4.4RRP

Table: Items which must be deducted from capital resources

1

Investments in own shares

2

Intangible assets (Note 1)

3

Interim net losses (Note 2)

4

Excess of drawings over profits for a sole trader or a partnership (Note 2)

Notes

Notes 1. Intangible assets are the full balance sheet value of goodwill (but not until 14 January 2008 - see transitional provision 1), capitalised development costs, brand names, trademarks and similar rights and licences.

2. The interim net losses in row 3, and the excess of drawings in row 4, are in relation to the period following the date as at which the capital resources are being computed.
MIPRU 4.4.6GRP
A sole trader or a partner may use any personal assets, including property, to meet the capital requirements of this chapter, but only to the extent necessary to make up a shortfall.
REC 2.11.1UKRP

Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(g)

2Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that-

where the [UK RIE's]facilitiesinclude making provision for the safeguarding and administration of assets belonging to users of thosefacilities, satisfactory arrangements are made for that purpose.
REC 2.11.3GRP
In determining whether a UK recognised body has made satisfactory arrangements for the safeguarding and administration of assets belonging to the users of its facilities, the FSA may have regard to: (1) the level of protection which the arrangements provide against the risk of theft or other types or causes of loss;(2) whether the arrangements ensure that assets are only used or transferred in accordance with the instructions of the owner of those assets or in accordance with
REC 2.11.4GRP
Where a UK recognised body arranges for other persons to provide services for the safeguarding and administration services of assets belonging to users of its facilities, it will also need to satisfy the recognition requirement in Regulation 6 of the Recognition Requirements Regulations (see REC 2.2).
LR 13.5.1RRP
Financial information, as set out in this section, must be included by a listed company in a class 1 circular if:(1) the listed company is seeking to acquire an interest in a target which will result in a consolidation of the target's assets and liabilities with those of the listed company; or(2) the listed company is seeking to dispose of an interest in a target which will result in the assets and liabilities no longer being consolidated; or(3) the target ("A") has itself acquired
COLL 7.3.1GRP
(1) The winding up of an ICVC may be carried out under this section instead of by the court provided the ICVC is solvent and the steps required under regulation 21 the OEIC Regulations (The Authority's approval for certain changes in respect of a company) are fulfilled. This section lays down the procedures to be followed and the obligations of the ACD and any other directors of the ICVC. (2) The termination of a sub-fund under this section will be subject to the conditions set
COLL 7.3.4RRP
(1) An ICVC must not be wound up except under this section or as an unregistered company under Part V of the Insolvency Act 1986.(2) An ICVC must not be wound up under this section if there is a vacancy in the position of ACD. (3) An ICVC must not be wound up or a sub-fund terminated under this section: (a) unless and until effect may be given, under regulation 21 of the OEIC Regulations, to proposals to wind up the affairs of the ICVC or to proposals to make the alterations to
COLL 7.3.11RRP
(1) Except to the extent that the ACD can show that it has complied with COLL 7.3.9 R (Duty to ascertain liabilities), the ACD:(a) is personally liable to meet any liability of an ICVC, of which it is the ACD, wound up under this section (whether or not the ICVC has been dissolved); and(b) must keep the ICVC indemnified against any liability allocated or attributable to a sub-fund that has been terminated under these rulesthat was not discharged before the completion of the winding
COLL 8.4.3RRP
(1) The scheme property of a qualified investor scheme may, subject to the rules in this chapter, comprise any assets or investments to which it is dedicated.(2) The instrument constituting the scheme and the prospectus may further restrict:(a) the kinds of assets in which the scheme property may be invested;(b) the types of transactions permitted and any relevant limits; and(c) the borrowing powers of the scheme.
COLL 8.4.5RRP
A qualified investor scheme may invest in units in a scheme (a second scheme) only if the second scheme is:(1) a regulated collective investment scheme; or(2) a scheme not within (1) where the authorised fund manager has taken reasonable care to determine that:(a) it is the subject of an independent annual audit conducted in accordance with international accounting standards;(b) it has its value verified by a person independent from its operator in relation to each day on which
COLL 8.4.6RRP
(1) An authorised fund manager must take reasonable care to determine the following when entering into any transaction in derivatives or any commodity contract which may result in any asset becoming part of the scheme property:(a) if it is an asset in which the scheme property could be invested, that the transaction:(i) can be readily closed out; or(ii) would at the expected time of delivery relate to an asset which could be included in the scheme property under the rules in this
COLL 8.5.9RRP
(1) The value of the scheme property is the net value of the scheme property after deducting any outstanding borrowings (including any capital outstanding on a mortgage of an immovable).(2) Any part of the scheme property which is not an investment (save an immovable) must be valued at fair value.(3) For the purposes of (2), any charges that were paid, or would be payable, on acquiring or disposing of the asset must be excluded from the value of that asset.(4) The value of the
COLL 8.5.10RRP
(1) The authorised fund manager must:(a) ensure that at each valuation point there are at least as many units in issue of any class as there are units registered to unitholders of that class; and(b) not do, or omit anything that would, or might confer on itself a benefit or advantage at the expense of a unitholder or potential unitholder.(2) For the purposes of (1) the authorised fund manager may take into account sales and redemptions after the valuation point, provided it has
COLL 8.5.12BGRP
4Reasonable steps to monitor the maximum allowable include:(1) regularly reviewing the register; and(2) taking reasonable steps to ensure that unitholders are kept informed of the requirement that no body corporate may hold more than 10% of the net asset value of a property authorised investment fund.
LR 15.2.2RRP
An applicant must invest and manage its assets in a way which is consistent with its object of spreading investment risk.
LR 15.2.5RRP
(1) No more than 10%, in aggregate, of the value of the total assets of an applicant1 at admission may be invested in other listed closed-ended investment funds.1(2) The restriction in (1) does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.
LR 15.2.7RRP
An applicant must have a published investment policy that contains information about the policies which the closed-ended investment fund will follow relating to asset allocation, risk diversification, and gearing, and that includes maximum exposures.
REC 2.5.1UKRP

Schedule to the Recognition Requirements Regulations, paragraph 3

2(1)

The [UK RIE] must ensure that the systems and controls used in the performance of its [relevant functions] are adequate, and appropriate for the scale and nature of its business.

(2)

Sub-paragraph (1) applies in particular to systems and controls concerning -

(a)

the transmission of information;

(b)

the assessment, mitigation and management of risks to the performance of the [UK RIE'srelevant functions];

(c)

the effecting and monitoring of transactions on the [UK RIE];

(ca)

the technical operation of the [UK RIE], including contingency arrangements for disruption to its facilities;

(d)

the operation of the arrangements mentioned in paragraph 4(2)(d); and

(e)

(where relevant) the safeguarding and administration of assets belonging to users of the [UK RIE's] facilities.
REC 2.5.4GRP
The following paragraphs set out other matters to which the FSA may have regard in assessing the systems and controls used for the transmission of information, risk management, the effecting and monitoring of transactions, the operation of settlement arrangements (the matters covered in paragraphs 4(2)(d) and 19(2)(b) of the Schedule to the Recognition Requirements Regulations) and the safeguarding and administration of assets .
REC 2.5.9GRP
In assessing a UK recognised body's systems and controls for the safeguarding and administration of assets belonging to users of its facilities, the FSA may have regard to the totality of the arrangements and processes by which the UK recognised body: (1) records the assets held and the identity of the owners of (and other persons with relevant rights over) those assets; (2) records any instructions given in relation to those assets;(3) records the carrying out of those instructions;(4)
GENPRU 1.3.2GRP
This section sets out, for the purposes of GENPRU, BIPRU and INSPRU, rules and guidance as to how a firm should recognise and value assets, liabilities, exposures, equity and income statement items.
GENPRU 1.3.4RRP
Subject to GENPRU 1.3.9 R to GENPRU 1.3.10 R and GENPRU 1.3.36 R, except where a rule in GENPRU, BIPRU or INSPRU provides for a different method of recognition or valuation, whenever a rule in GENPRU, BIPRU or INSPRU refers to an asset, liability, exposure, equity or income statement item, a firm must, for the purpose of that rule, recognise the asset, liability, exposure, equity or income statement item and measure its value in accordance with whichever of the following are applicable:(1)
GENPRU 1.3.5GRP
Except where a rule in GENPRU, BIPRU or INSPRU makes different provision, GENPRU 1.3.4 R applies whenever a rule in GENPRU, BIPRU or INSPRU refers to the value or amount of an asset, liability, exposure, equity or income statement item, including:(1) whether, and when, to recognise or de-recognise an asset or liability;(2) the amount at which to value an asset, liability, exposure, equity or income statement item; and(3) which description to place on an asset, liability, exposure,
GENPRU 1.3.6GRP
In particular, unless an exception applies, GENPRU 1.3.4 R should be applied for the purposes of GENPRU, BIPRU or INSPRU to determine how to account for:(1) netting of amounts due to or from the firm;(2) the securitisation of assets and liabilities (see also GENPRU 1.3.7 G);(3) leased tangible assets;(4) assets transferred or received under a sale and repurchase3 or stock lending transaction; and(5) assets transferred or received by way of initial or variation margin under a derivative
PERG 2.7.8GRP
The regulated activity of managing investments includes several elements.(1) First, a person must exercise discretion. Non-discretionary portfolio management (where the manager buys and sells, as principal or agent, on the instructions of some other person) is not caught by this activity, although it may be caught by a different regulated activity such as the activity of dealing in investments as principal or dealing in investments as agent. The discretion must be exercised in
COLL 5.6.3RRP
(1) An authorised fund manager must ensure that, taking account of the investment objectives and policy of the non-UCITS retail scheme as stated in its most recently published prospectus, the scheme property of the non-UCITS retail scheme aims to provide a prudent spread of risk(2) The rules in this section relating to spread of investments do not apply during any period in which it is not reasonably practical to comply, provided that (1) is complied with during such period.
COLL 5.6.4RRP
(1) The scheme property of a non-UCITS retail scheme may, subject to the rules in this section, comprise any assets or investments to which it is dedicated.(2) For an ICVC, the scheme property may also include movable or immovable property that is necessary for the direct pursuit of the ICVC's business of investing in those assets or investments.(3) The scheme property must be invested only in accordance with the relevant provisions in this section that are applicable to that
COLL 5.6.12RRP
(1) A transaction in derivatives or a forward transaction must not be effected for a non-UCITS retail scheme unless the transaction is:(a) of a kind specified in COLL 5.6.13 R2 (Permitted transactions (derivatives and forwards)); and2(b) covered, as required by COLL 5.3.3 R (Cover for transactions in derivatives and forward transactions).(2) Where a scheme invests in derivatives, the exposure to the underlying assets must not exceed the limits in COLL 5.6.7 R (Spread: general)
COLL 5.6.23AGRP
(1) 9Replication of the composition of an index shall be understood to be a reference to replication of the composition of the underlying assets of that index, including the use of techniques and instruments for the purpose of efficient portfolio management.(2) The composition of an index is sufficiently diversified if its components adhere to the spread requirements in this section.(3) An index is a representative benchmark if its provider uses a recognised methodology which
BIPRU 4.5.3RRP
Within the corporate exposureIRB exposure class, a firm must separately identify as specialised lending exposures, exposures which possess the following characteristics:(1) the exposure is to an entity which was created specifically to finance and/or operate physical assets;(2) the contractual arrangements give the lender a substantial degree of control over the assets and the income that they generate; and(3) the primary source of repayment of the obligation is the income generated
BIPRU 4.5.6RRP
(1) A firm using the methods set out in BIPRU 4.5.8 R (Slotting) for assigning risk weights for specialised lending exposures must assign each of these exposures to a grade in accordance with BIPRU 4 Annex 1 R, taking into account the following factors:(a) financial strength;(b) political and legal environment;(c) transaction and/or asset characteristics;(d) strength of the sponsor and developer including any public private partnership income stream; and(e) security package.(2)
LR 11.1.5RRP
In LR, a "related party transaction" means:(1) a transaction (other than a transaction of a revenue naturein the ordinary course of business) between a listed company and a related party; or(2) an arrangement pursuant to which a listed company and a related party each invests in, or provides finance to, another undertaking or asset; or(3) any other similar transaction or arrangement (other than a transaction of a revenue nature in the ordinary course of business) between a listed
SUP 18.4.4GRP
For a transfer to another friendly society, if the conditions of 87(1) and 87(2) of the Friendly Societies Act 1992 are met a report is required from the appropriate actuary of the transferee to confirm that it will meet the required minimum margin. Where the conditions of 87(1) and 87(3) are met the FSA may require a report from the appropriate actuary of the transferee to confirm that it will have an excess of assets over liabilities.
SUP 18.4.25GRP
The criteria that the FSA must use in determining whether to confirm a proposed amalgamation or transfer are set out in schedule 15 to the Friendly Societies Act 1992. These criteria include that:(1) confirmation must not be given if the FSA considers that:(a) there is a substantial risk that the successor society or transferee will be unable lawfully to carry out the engagements to be transferred to it;(b) information material to the members' decision about the amalgamation or
SUP 18.4.37GRP
The FSA will not decide whether to confirm the transfer or amalgamation at the hearing. A copy of its written decision, including its findings on the points made in representations, will be sent to the society(ies) and to those making representations. It will also be available to any other person on request and may be published.