Related provisions for IPRU-INV 12.2.2
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When calculating its prudential resources, the firm must exclude any amount by which the aggregate amount of its subordinated loans/debts exceeds the amount calculated as follows:a - bwhere:a=Items 1 - 5 in the Table of items which are eligible to contribute to a firm's prudential resources (see CONC 10.3.2 R)b=Items 1 - 5 in the Table of items which must be deducted in arriving at a firm's prudential resources (see CONC 10.3.3 R)[Note: Until 31 March 2017, transitional provisions
When calculating a firm’s capital resources, the following adjustments apply to retained profits or (for sole traders or partnerships) current accounts figures:(1) 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;(2) a firm must de-recognise any defined benefit asset; (3) a firm may substitute for a defined benefit liability its deficit reduction amount
(1) 6In identifying an appropriate range of adverse circumstances and events in accordance with GENPRU 1.2.42R (2):(a) a firm will need to consider the cycles it is most exposed to and whether these are general economic cycles or specific to particular markets, sectors or industries;(b) for the purposes of GENPRU 1.2.42R (2)(a), the amplitude and duration of the relevant cycle should include a severe downturn scenario based on forward looking hypothetical events, calibrated against
The amount of additional capital resources that a firm must hold as a result of an exclusion under IPRU-INV 13.1.21R1 must1 be calculated by referring to the firm's relevant income in the following table: Relevant income £000s Minimum additional capital resources more than up to £000s (Notes 1 and 2) 0 100 5 100 200 12 200 300 18 300 400 21 400 500 23 500 600 25 600 700 27 700 800 28 800 900 30 900 1,000 31 1,000 1,500 37 1,500 2,000 42
The amount of additional capital resources that a firm must hold where the policy's excess on any claim is more than £5,000 must be calculated by referring to the firm's relevant income and excess obtained in the following table: All amounts are shown in £000s (Notes 1 and 2) Relevant income is Excess obtained, up to and including more than up to 5 10 15 20 25 30 40 50 75 100 150 200+ 0 100 0 4 7 9 12 14 18 21 28 34 45 54 100 200 0 7 11 14 17
The credit risk capital requirement3of a firm is 8% of the total of its risk weighted exposure amounts for exposures that:3(1) are on its balance sheet; and(2) derive from: (a) a loan entered into; or(b) a securitisation position originated; or(c) a fund3position entered into;3on or after 26 April 2014; and (3) have not been deducted from the firm'scapital resources under MIPRU 4.4.4 R or MIPRU 4.2BA;calculated in accordance with MIPRU 4.2A.
The capital conservation plan must include the following(1) the MDA; (2) estimates of income and expenditure and a forecast balance sheet;(3) measures to increase the capital ratios of the firm; and(4) a plan and timeframe for the increase of own funds with the objective of meeting the combined buffer. [Note: article 142(2) of CRD]
If the Part 4A permission of a firm contains a requirement obliging it to comply with this rule with respect to a third-country banking and investment group of which it is a member, it must comply, with respect to that third-country banking and investment group, with the rules in Part 2 of GENPRU 3 Annex 2, as adjusted by Part 3 of that annex.