Related provisions for BIPRU 8.7.39
1 - 7 of 7 items.
The calculation of the consolidated capital resources requirement of a firm's UK consolidation group or non-UK sub-group5 involves taking the individual components that make up the capital resources requirement on a solo basis and applying them on a consolidated basis. Those components are the capital charge for credit risk (the credit risk capital requirement), the capital charge for market risk (the market risk capital requirement)4 and the fixed overheads requirement.
In general a firm should calculate each consolidated requirement component using the appropriate regulator'srules, even in the case of group members who are subject to the capital requirements of an overseas regulator. However this section sets out certain circumstances in which a firm may use the capital requirements of an overseas regulator.
BIPRU 8.8 (Advanced prudential calculation approaches) says that a firm should not apply an advanced prudential calculation approach on a consolidated basis unless the advanced prudential calculation approach permission allowing the firm to use the advanced prudential calculation approach specifically allows it to be used on consolidated basis.
A firm may make the choice between an aggregation and a line by line approach differently for each consolidated requirement component. So for example a firm may decide to calculate the consolidated market risk requirement on an aggregation basis and the consolidated fixed overheads requirement on a line by line basis.
A firm must calculate the consolidated capital resources requirement of its UK consolidation group or non-UK sub-group5 as the higher of the following consolidated requirements components:33(1) the sum of the consolidated credit risk requirement and the consolidated market risk requirement; and3(2) the consolidated fixed overheads requirement. 3
A firm must calculate a consolidated requirement component by applying the risk capital requirement applicable to that consolidated requirement component to the UK consolidation group or non-UK sub-group5 in accordance with BIPRU 8.7.13 R. The5risk capital requirement must be calculated in accordance with the appropriate regulator'srules. The risk capital requirement applicable to a consolidated requirement component is the one specified in the second column of the table in BIPRU
Table: Capital charges relating to consolidated requirement components
This table belongs to BIPRU 8.7.11 R
Rules on which the consolidated requirement component are based (the applicable risk capital requirement) |
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(1) A firm must calculate a consolidated requirement component by using one of the methods in this rule.(2) Under the first method a firm must:(a) apply the risk capital requirement set out in BIPRU 8.7.12 R to each undertaking in the UK consolidation group or non-UK sub-group5; and(b) add the risk capital requirements together.(3) Under the second method a firm must:(a) treat the whole UK consolidation group or non-UK sub-group5 as a single undertaking; and(b) apply the risk
A firm must notify the appropriate regulator which method under BIPRU 8.7.13 R it applies for which consolidated requirement component and to which parts of the UK consolidation group or non-UK sub-group5 it is applying an aggregation approach and to which parts it is applying an accounting consolidation approach.
A firm may not apply the second method in BIPRU 8.7.13R (3) (accounting consolidation for the whole group) or apply accounting consolidation to parts of its UK consolidation group or non-UK sub-group5 under method three as described in BIPRU 8.7.13R (4)(a) for the purposes of the calculation of the consolidated market risk requirement unless the group or sub-group and the undertakings in that group or sub-group satisfy the conditions in this rule. Instead the firm must use the
BIPRU 8.7.21 R to BIPRU 8.7.26 R are generally examples of the application of the general principles in BIPRU 8.2.1 R (Main consolidation rule for UK consolidation groups) and BIPRU 8.3.1 R (Main consolidation rule for non-UK sub-groups5). BIPRU 8.7.20 R and BIPRU 8.7.25 R are exceptions to those principles.
Subject to rule 14.1.2, consolidated supervision and this chapter apply to a firm which is a member of a group if: (1) It is: (a) a securities and futures
firm, subject to the financial rules in Chapter 3, which is a broad scope firm but not a venture capital firm.2(b) [deleted](c) [deleted](2) [deleted]2(3) [Deleted](4) [Deleted](5) [Deleted]
A firm is not subject to consolidated supervision2 under the rules in this Chapter where any of the following conditions are fulfilled: (1) the firm is included in the supervision on a consolidated basis of the group of which it is a member by a competent authority other than the FCA; or (2) the firm is 2included in the supervision on a consolidated basis of the group of which it is a member by the FCA under MIFIDPRU 2.5 (prudential consolidation)2; or(3) the firm is subject,
A firm need not meet the requirements in rules 14.3.1 and 14.3.2 if: (1) there is no credit
institution in the group;
(2) no firm in the group
deals in investments as principal, except where it is dealing solely as a result of its activity of operating a collective investment
scheme2(3) [Deleted](4) the firm notifies the FCA of any serious risk that could undermine the financial stability
Where a firm is a member of a group, it should base its ICAAP on the consolidated financial position of the group. The group assessment should include information on diversification benefits and transferability of resources between members of the group and an apportionment of the capital required by the group as a whole to the firm (GENPRU 1.2.44 G to GENPRU 1.2.56 G (Application of GENPRU 1.2 on a solo and consolidated basis: Processes and tests)). A firm may, instead of preparing
If BIPRU 2.2.41 R applies to a firm on a consolidated basis the following adjustments are made to BIPRU 2.2.41 R in accordance with the general principles of BIPRU 8 (Group risk - consolidation):(1) references to capital resources are to the consolidated capital resources of the firm'sUK consolidation group or, as the case may be, its non-UK sub-group7; and(2) references to the capital requirements in GENPRU 2.1 (Calculation of capital resources requirements) are to the consolidated
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 which are the subject of the disposal2 no longer being consolidated;
2When a listed company is acquiring or disposing of an interest in a target that was or will be accounted for using the equity method in the listed company's annual consolidated accounts, the class 1 circular should include:(1) for an acquisition,(a) a narrative explanation of the proposed accounting treatment of the target in the issuer's next audited consolidated accounts; (b) a financial information table for the target; (c) a statement that the target financial information
(1) 2In the case of a class 1 disposal, a financial information table must include for the target:(a) the last annual consolidated balance sheet; (b) the consolidated income statements for the last three years drawn up to at least the level of profit or loss for the period; and(c) the consolidated balance sheet and consolidated income statement (drawn up to at least the level of profit or loss for the period) at the issuer's interim balance sheet date if the issuer has published
The requirements and guidance in this section are drafted so as to apply to a firm on a solo basis. As noted in GENPRU 1.2.17 G, however, in some cases the requirements in GENPRU 1.2 apply on a consolidated basis. In these cases, a firm should read and apply this section making appropriate adjustments to reflect the application of the GENPRU 1.2 requirements on a consolidated basis.
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.