Related provisions for INSPRU 3.2.28
Table: Option PRR: methods for different types of option
This table belongs to BIPRU 7.6.16R
Option |
Description |
Method |
American option |
An option that may be exercised at any time over an extended period up to its expiry date. |
Option standard method or option hedging method if appropriate |
European option |
An option that can only be exercised at expiry. |
|
Bermudan option |
A cross between an American option and European option. The Bermudan option can only be exercised at specific dates during its life. |
|
Asian option |
The buyer has the right to exercise at the average rate or price of the underlying over the period (or part of the period) of the option. One variant is where the payout is based on the average of the underlying against a fixed strike price; another variant is where the payout gives at expiry the price of the underlying against the average price over the option period. |
Option standard method or option hedging method if appropriate |
Barrier option |
An option which is either cancelled or activated if the price of the underlying reaches a pre-set level regardless of the price at which the underlying may be trading at the expiry of the option. The knock-out type is cancelled if the underlying price or rate trades through the trigger; while the knock-in becomes activated if the price moves through the trigger. |
|
Corridor option |
Provides the holder with a pay-out for each day that the underlying stays within a defined range chosen by the investor. |
|
Ladder option |
Provides the holder with guaranteed pay-outs if the underlying trades through a pre-agreed price(s) or rate(s) at a certain point(s) in time, regardless of future performance. |
|
Lock-in option |
An option where the pay-out to the holder is locked in at the maximum (or minimum) value of the underlying that occurred during the life of the option. |
|
Look-back option |
A European style option where the strike price is fixed in retrospect, that is at the most favourable price (i.e. the lowest (highest) price of the underlying in the case of a call (put)) during the life of the option. |
|
Forward starting option |
An option that starts at a future date. |
|
Compound option |
An option where the underlying is itself an option (i.e. an option on an option). |
Option standard method or option hedging method if appropriate |
Interest rate cap |
An interest rate option or series of options under which a counterparty contracts to pay any interest costs arising as a result of an increase in rates above an agreed rate: the effect being to provide protection to the holder against a rise above that agreed interest rate. |
Option standard method, but no reduction for the amount the option is out of the money is permitted |
Interest rate floor |
An interest rate option or series of options under which a counterparty contracts to pay any lost income arising as a result of a fall in rates below an agreed rate: the effect being to provide protection to the holder against a fall below that agreed interest rate. |
|
Performance option |
An option based on a reference basket comprising any number of assets, where the pay-out to the holder could be one of the following: the maximum of the worst performing asset, or 0; the maximum of the best performing asset, or 0; the maximum of the spreads between several pairs of the assets, or 0. |
Option standard method or option hedging method - using the highest position risk adjustment of the individual assets in the basket |
Quanto |
Quanto stands for "Quantity Adjusted Option". A quanto is an instrument where two currencies are involved. The payoff is dependent on a variable that is measured in one of the currencies and the payoff is made in the other currency. |
Subject to BIPRU 7.6.31R, the option standard method |
Cliquet option |
A cliquet option consists of a series of forward starting options where the strike price for the next exercise date is set equal to a positive constant times the underlying price as of the previous exercise date. It initially acts like a vanilla option with a fixed price but as time moves on, the strike is reset and the intrinsic value automatically locked in at pre-set dates. If the underlying price is below the previous level at the reset date no intrinsic value is locked in but the strike price will be reset to the current price attained by the underlying. If the underlying price exceeds the current level at the next reset the intrinsic value will again be locked in. |
Option standard method for a purchased cliquet, or the method specified in BIPRU 7.6.30R for a written cliquet |
Digital option |
A type of option where the pay-out to the holder is fixed. The most common types are all-or-nothing and one-touch options. All-or-nothing will pay out the fixed amount if the underlying is above (call) or below (put) a set value at expiry. The one-touch will pay the fixed amount if the underlying reaches a fixed point any time before expiry. |
The method specified in BIPRU 7.6.29 R |
The method specified for the type of instrument whose description it most closely resembles. |
Table of application, notification and vetting fees payable to the FCA74
(1) Fee payer |
(2) Fee payable |
Due date |
(a) Any applicant for Part 4A permission (including an incoming firm applying for top-up permission) whose fee is not payable pursuant to sub- paragraph (ga) of this table26 |
(1) Unless (2) applies, in1 respect of a particular application, the highest of the tariffs set out in FEES 3 Annex 1 part 11 which apply to that application. (2) In respect of a particular application which is: (i) a straightforward or moderately complex case for the purposes of FEES 3 Annex 1 part 1, and (ii) only involves a simple change of legal status as set out in FEES 3 Annex 1 part 6, the fee payable is 50% of the tariff that would otherwise be payable in FEES 3 Annex 1 part 11 1 |
On or before the application is made |
(b) Any Treaty firm that wishes to exercise a Treaty right to qualify for authorisation under Schedule 4 to the Act (Treaty rights) in respect of regulated activities for which it does not have an EEA right, except for a firm providing cross border services only4 |
(1) Where no certificate has been issued under paragraph 3(4) of Schedule 4 to the Act the fee payable is, in respect of a particular exercise, set out in FEES 3 Annex 1, part 4 (2) Where a certificate in (i) has been issued no fee is payable |
On or before the notice of exercise is given |
(c) Any applicant for a certificate under article 54 of the Regulated Activities Order |
2,000 |
On or before the application is made |
(d) Applicants for an authorisation order for, or recognition of, a collective investment scheme |
FEES 3 Annex 2, part 1 |
On or before the application is made |
(f) Any person seeking an order under section 326(1) of the Act to become a designated professional body. |
10,000 |
30 days after the order is granted |
(g) Any applicant for recognition as a UK recognised body:17 (i) under section 287 of the Act; or17 (ii) under regulation 2(1) of the RAP regulations17 74 |
FEES 3 Annex 3, part 1 |
On or before the date the application is made26 |
26(ga) Any applicant for: (i) a Part 4A permission to carry out the regulated activity of administering a specified benchmark; or (ii) varying its Part 4A permission to carry out the regulated activity of administering a specified benchmark |
FEES 3 Annex 3, part 1 |
On or before the date the application is made |
(h) Any applicant for recognition as an ROIE74 under section 287 or section 292 of the Act 7474 |
FEES 3 Annex 3, part 2 |
On or before the date the application is made |
(i) An applicant for listing (under the listing rules) |
FEES 3 Annex 4, part 1 |
On or before the date the application is made |
(j) Applicant for approval as sponsor (under the listing rules) |
FEES 3 Annex 4, part 2 |
On or before the date the application is made |
(k) Issuers of tranches from debt issuance programmes and securitised derivative tranches |
FEES 3 Annex 4, part 1 |
An upfront fee is required per tranche for draw downs in the following 12 months |
(l) Under the listing rules, an issuer involved in specific events or transactions during the year where documentation is subject to a transaction vetting |
FEES 3 Annex 5, part 1, unless the transaction would come within the definition of significant transaction under category (v) or super transaction under category 7(q) in this table, in which case the fee payable under that category.2 |
On or before the date that relevant documentation is first submitted to the FCA |
(m) Under the prospectus rules, an issuer or person requesting approval or vetting of the documents arising in relation to specific events or transactions that it might be involved in during the year |
FEES 3 Annex 5, part 2, unless the transaction would come within the definition of significant transaction under category (v) or super transaction under category 7(q) in this table, in which case the fee payable under that category.2 |
On or before the date that relevant documentation is first submitted to the FCA |
(n) Applicants to be added to the list of designated investment exchanges |
50,000 |
On or before the date the application is made |
(i) a firm applying to the appropriate regulator74 for permission to use one of the advanced prudential calculation approaches listed in FEES 3 Annex 6 R (or guidance on its availability), including any future proposed amendments to those approaches or (in the case of any application being made for such permission to the appropriate regulator74 as EEA consolidated supervisor under the ) any firm making such an application ;5 or (ii) in the case of an application to 5a Home State regulator other than the appropriate regulator745for the use of the Internal Ratings Based approach and the Home State regulator requesting the appropriate regulator's74 assistance in accordance with the Capital Requirements Regulations 2006 , any firm to which the appropriate regulator74 would have to apply any decision to permit the use of that approach.5 1125745745747474 |
(1) Unless5 (2) applies, FEES 3 Annex 6.5 (2) (a) Unless5 (b) applies a1firm submitting a second application for the permission or5guidance described in column (1) within 12 months of the first application (where the fee was paid in accordance with (1)) must pay 50% of the fee applicable to it under FEES 3 Annex 6, but only in respect of that second application (b) No fee is payable by a firm in relation to a successful application for a permission5 based on a minded to grant decision in respect of the same matter following a complete application for guidance in accordance with prescribed submission requirements.1 (c) No fee is payable where the Home State regulator has requested the assistance described in paragraph (o)(ii) of column 1 except in the cases specified in 5FEES 3 Annex 6.2 52512555745745 |
Where the firm has made an application directly to the appropriate regulator74, on or before the date the application is made, otherwise within 30 days after the appropriate regulator74 notifies the firm that its EEA parent's Home State regulator has requested assistance.2 2747474 |
(p) A firm applying for a variation of its Part 4A permission whose fee is not payable pursuant to sub- paragraph (ga) of this table26 |
(1) Unless (2) or (3)11 applies, if the proposed new1 business of the firm would1 fall within one or more activity groups specified in Part 1 of FEES 4 Annex 1A or Part 1 of 74 not applicable before the application1, the fee is 50% of the highest of the tariffs set out in which apply to that application. (2) If the only change is that the1 A.12 activity group tariff applied to the firm's business before the variation and the A.13 activity group will apply after variation, no fee is payable (3) If the firm is in the A.1 fee-block at the date of the application and the variation involves adding any of the regulated activities of meeting of repayment claims or managing dormant account funds (including the investment of such funds), the fee is 50% of the fee in FEES 3 Annex 1 R that applies to that application11 (4) 11 In all other cases, other than applications by credit unions, the fee payable is 250 for firms which are not, or are not seeking to become, a PRA-authorised person, and 125 for firms which are, or are seeking to become, a PRA-authorised person,74 unless the variation involves only the reduction (and no other increases) in the scope of a Part 4A permission in which case no fee is payable.1 17474111 |
On or before the date the application is made |
2(q) A super7transaction, being one where: (i) the issuer has a market capitalisation in excess of 1.5 billion and it is a new applicant for a premium listing1375 under the listing rules, or involved in a reverse or hostile takeover or a significant restructuring; or (ii) the issuer has a market capitalisation in excess of 5 billion and is involved in a class 1 transaction,7 a transaction requiring vetting of an equity prospectus or equivalent document or a transaction requiring vetting of a prospectus or listing particulars in relation to a Depositary Receipt.22 713757227 |
50,000 |
On or before the date that the relevant documentation is first submitted to the FCA.3 33 |
2(r) Providers of reporting or trade matching systems applying for recognition under MiFID as an Approved Reporting Mechanism. |
100,0006 6 |
Having received its application, within 30 days after the FCA has notified the applicant that it is to commence testing of the applicants systems.6 56 |
5(s) In the case of an insurance business transfer scheme, a transferor. Note - for the purpose of this paragraph an insurance business transfer scheme consists of a single transferor and a single transferee. Where however such a scheme is part of a single larger scheme, that larger scheme is treated as a single insurance business transfer scheme. If an insurance business transfer scheme includes more than one transferor in accordance with this paragraph, the transferors are liable to pay the fee under column (2) jointly. |
Either (1) or (2) as set out below: (1) In the case of an insurance business transfer scheme involving long term insurance business, 9,250 to the PRA and 9,250 to the FCA73 ; or (2) in the case of an insurance business transfer scheme not involving long term insurance business, 5,000. to the PRA and 5,000 is payable to the FCA.73 73The amount payable to the PRA above is collected by the FCA as agent of the PRA. 7373 |
On or before any application is made to the PRA for the appointment of a person as an independent expert. |
6(t) A firm, a third party acting on a firm's behalf, an operator of a regulated market or an operator of an MTF applying to the FCA to report transaction reports directly to the FCA. 20 |
100,000 |
Having received its application, within 30 days after the FCA has notified the applicant that it is to commence testing of the applicants systems. |
7(u) Any of the following: (i) an operator of an approved reporting mechanism; (ii) a firm; (iii) a third party acting on behalf of a firm; (iv) a market operator; or (v) an MTF operator; that satisfies the following conditions: (1) it provides transaction reports directly to the FCA; and (2) having made changes to its reporting systems, it asks the FCA to support the testing of the compatibility of its systems with the FCA's systems. |
As set out in FEES 3 Annex 7. |
Within 30 days of the date of the invoice. |
(v) A significant transaction, being one where: (i) the issuer has a market capitalisation in excess of 500 million and is producing an equity prospectus or equivalent document, a prospectus or listing particulars22 in relation to a Depository Receipt or a document in relation to a class 1 transaction; or (ii) the issuer is producing a document for vetting in relation to a reverse takeover, a hostile takeover or a significant restructuring. A significant transaction does not include a super transaction. 22 |
20,000 |
On or before the date that the relevant documentation is first submitted to the FCA. |
(w) A listed issuer that requests or whose representative requests the FSAFCA to amend the Official List, or any records held by the FSAFCA in relation to the Official List, otherwise than pursuant to an application for listing. |
FEES 3 Annex 4 part 3 |
On or before the date the request is made. |
(x) (1) is a fee payer under one or more of the categories set out in (ii); and (2) requests the FCA's approval or vetting of a document that includes a mineral expert's report. (ii) The categories are (1), (m) (q), and (v) of this table. (iii) A fee under this category is payable in addition to any fee payable under the categories set out in (ii). |
5,000 |
On or before the date the relevant documentation is first submitted to the FCA.8 |
8(y) An applicant for authorisation as an authorised payment institution under regulation 5 of the Payment Services Regulations |
The highest of the tariffs set out in FEES 3 Annex 8 which apply to that application. Where an application only involves a simple change of legal status as set out in FEES 3 Annex 1 Part 6, the fee payable is 50% of the tariff that would otherwise be payable in |
On or before the date the application is made. |
(z) An application by a small payment institution for authorisation as an authorised payment institution because regulation 15 of the Payment Services Regulations applies |
The highest of the tariffs set out in FEES 3 Annex 8R which apply to that application. |
On or before the date the application is made. |
(za) An applicant for registration as a small payment institution under regulation 12 of the Payment Services Regulations |
FEES 3 Annex 8R, paragraph (1). Where an application only involves a simple change of legal status as set out in FEES 3 Annex 1 R Part 6, the fee payable is 50% of the tariff that would otherwise be payable in FEES 3 Annex 8R. |
On or before the date the application is made. |
(zb) An authorised payment institution applying to vary its authorisation under regulation 8 of the Payment Services Regulations. |
(1) If the payment services carried on by the authorised payment institution prior to the variation only fall within paragraph (f) or (g) or (h) of Part 1 of Schedule 1 to the Payment Services Regulations and any of the payment services in paragraphs (a) to (e) of that Schedule will apply after variation, the fee is 50% of the highest of the tariffs set out in FEES 3 Annex 8R which apply to that application. (2) Where the authorised payment institution:(i) already has authorisation to provide payment services within any one or more of paragraphs (a) to (e) of Part 1 of Schedule 1 to the Payment Services Regulations and wishes to add one or more other services in (a) to (g); or (ii) has authorisation to provide payment services in either paragraph (f) or (g) of Part 1 of Schedule 1 to the Payment Services Regulations and wishes to extend its authorisation to include the other paragraph ((f) or (g)); the fee payable is 250 irrespective of the number of agents it has. (3) In cases where the variation involves only the reduction (and no increases) of the types of payment services to be carried on after the variation, no fee is payable. |
On or before the date the application is made. |
(zc) A small payment institution applying to vary its registration under regulation 12 of the Payment Services Regulations |
(1) If the payment services carried on by the small payment institution prior to the variation only fall within paragraph (f) or (g) of Part 1 of Schedule 1 to the Payment Services Regulations and any of the payment services in paragraphs (a) to (e) of that Schedule will apply after variation, the fee is 50% of the highest of the tariffs set out in FEES 3 Annex 8Rwhich apply to that application. (2) Where the small payment institution: (i) is already registered to provide payment services within any one or more of paragraphs (a) to (e) of Part 1 of Schedule 1 to the Payment Services Regulations and wishes to add one or more other of the services in (a) to (g); or (ii) is registered to provide payment services in either paragraph (f) or (g) of Part 1 of Schedule 1 to the Payment Services Regulations and wishes to extend its registration to include the other paragraph ((f) or (g));the fee payable is 250 irrespective of the number of agents it has. (2) (3) In cases where the variation involves only the reduction (and no increases) of the types of payment services to be carried on after the variation, no fee is payable. |
On or before the date the application is made. |
A financial institution notifying the FSAFCA in accordance with regulation 121(2)(a) of the Payment Services Regulations. |
50% of the highest of the tariffs set out in FEES 3Annex 8R, paragraphs (2) to (5) which apply to that application. |
On or before the date the application is made. |
(ze) Any person to which the Special Project Fee for restructuring applies under FEES 3 Annex 9.12 12 |
Special Project Fee for restructuring in accordance with FEES 3 Annex 9 . |
|
(zf) [deleted]74 74 |
74 | 91674 |
16(zg) An applicant for authorisation as an authorised electronic money institution under regulation 5 of the Electronic Money Regulations. |
The amount set out in FEES 3 Annex 10 R. Where an application only involves a simple change of legal status as set out in FEES 3 Annex 1 R Part 6, the fee payable is 50% of the tariff that would otherwise be payable in FEES 3 Annex 10 R. |
On or before the date the application is made. |
16(zh) An applicant for registration as a small electronic money institution under regulation 12 of the Electronic Money Regulations. |
The amount set out in FEES 3 Annex 10 R. Where an application only involves a simple change of legal status as set out in FEES 3 Annex 1 R Part 6, the fee payable is 50% of the tariff that would otherwise be payable in FEES 3 Annex 10 R. |
On or before the date the application is made. |
16(zi) An application by a small electronic money institution for authorisation as an authorised electronic money institution14because regulation 16 of the Electronic Money Regulations applies. |
The amount set out in FEES 3 Annex 10 R. |
On or before the date the application is made. |
16(zj) An authorised electronic money institution applying to vary its authorisation under regulation 8 of the Electronic Money Regulations. |
The amount set out in FEES 3 Annex 10 R. |
On or before the date the application is made. |
16(zk) A small electronic money institution applying to vary its registration under regulation 12 of the Electronic Money Regulations. |
The amount set out in FEES 3 Annex 10 R. |
On or before the date the application is made. |
15(zl) An applicant for recognition as an accredited body. |
2,500 |
On or before the date the application is made.18 |
18(zm) An issuer applying for registration of a regulated covered bond. |
(1) Unless (2) applies, 45,000. (2) In the case of a proposed covered bond or programme where the assets in the asset pool will consist primarily of UK residential mortgages, 25,000. |
On or before the date the application is made. |
18(zn) An issuer who proposes to make a material change to the contractual terms of a regulated covered bond under RCB 3.5.4 D. |
6,500 |
On or before the date the notification under RCB 3.5.4 D is made.21 |
21(zo) In the case of persons in respect of which the FCA has given notice of its intention to take, or appoint a competent person to take, any steps under CONRED 2.5.12R, either: (i) a Firm (as defined in CONRED 2.1.1R(1); or (ii) a person falling within CONRED 2.1.2R(1). |
An amount equal to: (1) a sum determined by the number of hours, or part of an hour, taken by the FCA in relation to work conducted in taking steps under recorded on the FCA's systems, multiplied by the rate in FEES 3 Annex 9 (11)R; or (2) any amount invoiced to the FCA by a competent person in relation to any work carried out by that competent person in connection with its appointment by the FCA under CONRED 2.5.12R. |
Within 30 days of the date of the invoice. |
74(zp) A person in respect of which the appropriate regulator has given notice of its intention to itself appoint a skilled person to provide it with a report pursuant to section 166(3)(b) of the Act and SUP 5.2. |
Any amount invoiced to the appropriate regulator by a skilled person in relation to any work carried out by that skilled person in connection with its appointment by the appropriate regulator pursuant to section 166(3)(b) of the Act. |
Within 30 days of the date of the invoice. |
74(zq) A person in respect of which the appropriate regulator has given notice of its intention to itself appoint a skilled person to collect or update information pursuant to section 166A(2)(b) of the Act. |
Any amount invoiced to the appropriate regulator by a skilled person in relation to any work carried out by that skilled person in connection with its appointment by the appropriate regulator pursuant to section 166A(2)(b) of the Act. |
Within 30 days of the date of the invoice. |
[Note:Guidance on how a firm liable to pay a fee under both rows (s) and (ze) of this table for the same transaction should expect to be treated is set out in FEES 3 Annex 11 G.]19
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