Related provisions for BIPRU 12.4.11A

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SYSC 19D.3.1RRP
(1) A firm must apply the requirements of this section at group, parent undertaking and subsidiary undertaking levels, including those subsidiaries established in a country or territory which is not an EEA State.(2) Paragraph (1) does not limit SYSC 12.1.13R(2)(dA) (which relates to the application of the dual-regulated firms Remuneration Code within UK consolidation groupsand non-EEA sub-groups). [Note: article 92(1) of CRD]
SYSC 19D.3.2GRP
SYSC 12.1.13R(2)(dA) requires the firm to ensure that the risk management processes and internal control mechanisms at the level of any UK consolidation group or non-EEA sub-group of which a firm is a member, comply with the obligations in this section on a consolidated basis (or sub-consolidated basis). In the FCA’s view, the application of this section at group, parent undertaking and subsidiary undertaking levels in SYSC 19D.3.1R(1) is in line with article 109(2) of the CRD
SYSC 19D.3.3RRP
(1) This section applies in relation to dual-regulated firms Remuneration Code staff, except as set out in (3).(2) When establishing and applying the total remuneration policies for dual-regulated firms Remuneration Code staff, a firm must comply with this section in a way, and to the extent, that is appropriate to its size, internal organisation and the nature, the scope and the complexity of its activities (the dual-regulated firms remuneration principles proportionality rule).(3)
SYSC 19D.3.4RRP
(1) Dual-regulated firms Remuneration Code staff comprises:(a) an employee of a dual-regulated firm whose professional activities have a material impact on the firm’s risk profile, including any employee who is deemed to have a material impact on the firm’s risk profile in accordance with Regulation (EU) 604/2014 of 4 March 2014 (Regulatory technical standards to identify staff who are material risk takers); or(b) subject to (2) and (3), an employee of an overseas firm in SYSC
SYSC 19D.3.7RRP
A firm must ensure that its remuneration policy is consistent with, and promotes, sound and effective risk management and does not encourage risk-taking that exceeds the level of tolerated risk of the firm.[Note: article 92(2)(a) of CRD]
SYSC 19D.3.8RRP
A firm must ensure that its remuneration policy is in line with the business strategy, objectives, values and long-term interests of the firm.[Note: article 92(2)(b) of CRD]
SYSC 19D.3.9RRP
A firm must ensure that its remuneration policy includes measures to avoid conflicts of interest.[Note: article 92(2)(b) of CRD]
SYSC 19D.3.10RRP
A firm must ensure that its management body in its supervisory function adopts and periodically reviews the general principles of the remuneration policy and is responsible for overseeing its implementation.[Note: article 92(2)(c) of CRD and Standard 1 of the FSB Compensation Standards]
SYSC 19D.3.11RRP
A firm must ensure that the implementation of the remuneration policy is, at least annually, subject to central and independent internal review for compliance with policies and procedures for remuneration adopted by the management body in its supervisory function.[Note: article 92(2)(d) of CRD and Standard 1 of the FSB Compensation Standards]
SYSC 19D.3.12RRP
(1) A firm that is significant in terms of its size, internal organisation and the nature, the scope and the complexity of its activities must establish a remuneration committee. (2) A firm in (1) must ensure that:(a) the remuneration committee is constituted in a way that enables it to exercise competent and independent judgement on remuneration policies and practices and the incentives created for managing risk, capital and liquidity;(b) the chairman and the members of the remuneration
SYSC 19D.3.13RRP
A firm that maintains a website must explain on the website how it complies with the dual-regulated firms Remuneration Code.[Note: article 96 of the CRD]
SYSC 19D.3.15RRP
A firm must ensure that employees engaged in control functions:(1) are independent from the business units they oversee;(2) have appropriate authority; and(3) are remunerated:(a) adequately to attract qualified and experienced employees; and(b) in accordance with the achievement of the objectives linked to their functions, independent of the performance of the business areas they control.[Note: article 92(2)(e) of CRD and Standard 2 of the FSB Compensation Standards]
SYSC 19D.3.17RRP
A firm must ensure that the remuneration of the senior officers in risk management and compliance functions is directly overseen by the remuneration committee referred to in SYSC 19D.3.12R or, if such a committee has not been established, by the governing body in its supervisory function.[Note: article 92(2)(f) of CRD]
SYSC 19D.3.19RRP
A firm must ensure that total variable remuneration does not limit the firm's ability to strengthen its capital base.[Note: article 94(1)(c) of the CRD and Standard 3 of the FSB Compensation Standards]
SYSC 19D.3.21RRP
A firm that benefits from exceptional government intervention must ensure that:(1) variable remuneration is strictly limited as a percentage of net revenues when it is inconsistent with the maintenance of a sound capital base and timely exit from government support;(2) it restructures remuneration in a manner aligned with sound risk management and long-term growth, including (when appropriate) establishing limits to the remuneration of members of its management body; and(2) no
SYSC 19D.3.23RRP
(1) A firm must ensure that any measurement of performance used to calculate variable remuneration components or pools of variable remuneration components: (a) includes adjustments for all types of current and future risks and takes into account the cost and quantity of the capital and the liquidity required; and (b) takes into account the need for consistency with the timing and likelihood of the firm receiving potential future revenues incorporated into current earnings. (2)
SYSC 19D.3.29RRP
(1) A firm’s risk-adjustment approach must reflect both ex-ante adjustment (which adjusts remuneration for intrinsic risks that are inherent in its business activities) and ex-post adjustment (which adjusts remuneration for crystallisation of specific risks events).(2) A firm must ensure that its total variable remuneration is generally considerably contracted where subdued or negative financial performance of the firm occurs, taking into account both current remuneration and
SYSC 19D.3.31RRP
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19D.3.56R(1); and(3) when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19D.3.56R(1)
SYSC 19D.3.32RRP
(1) A firm must ensure that its employees undertake not to use personal hedging strategies to undermine the risk alignment effects embedded in their remuneration arrangements. (2) A firm must ensure that its employees do not use remuneration- or liability-related contracts of insurance to undermine the risk alignment effects embedded in their remuneration arrangements.(3) A firm must maintain effective arrangements designed to ensure that employees comply with their undertaking.[Note:
SYSC 19D.3.34RRP
A firm must ensure that variable remuneration is not paid through vehicles or methods that facilitate non-compliance with obligations arising from the Remuneration Code, the EU CRR or the CRD.[Note: article 94(1)(q) of the CRD]
SYSC 19D.3.37RRP
A firm must ensure that the remuneration policy makes a clear distinction between criteria for setting:(1) basic fixed remuneration that primarily reflects an employee's professional experience and organisational responsibility, as set out in the employee's job description and terms of employment; and(2) variable remuneration that reflects performance in excess of that required to fulfil the employee's job description and terms of employment and that is subject to performance
SYSC 19D.3.39RRP
(1) A firm must ensure that where remuneration is performance-related:(a) the total amount of remuneration is based on a combination of the assessment of the performance of:(i) the individual;(ii) the business unit concerned; and(iii) the overall results of the firm; and(b) when assessing individual performance, financial as well as non-financial criteria are taken into account.[Note: article 94(1)(a) of the CRD and Standard 6 of the FSB Compensation Standards]
SYSC 19D.3.43RRP
A firm must ensure that the assessment of performance is set in a multi-year framework in order to ensure that:(1) the assessment process is based on longer-term performance; and(2) the actual payment of performance-based components of remuneration is spread over a period which takes account of the underlying business cycle of the firm and its business risks.[Note: article 94(1)(b) of CRD]
SYSC 19D.3.44RRP
(1) A firm must ensure that guaranteed variable remuneration is not part of prospective remuneration plans.(2) A firm must not award, pay or provide guaranteed variable remuneration unless:(a) it is exceptional;(b) it occurs in the context of hiring new dual-regulated firms Remuneration Code staff;(c) the firm has a sound and strong capital base; and(d) it is limited to the first year of service.[Note: article 94(1)(d) and (e) of the CRD and Standard 11 of the FSB Compensation
SYSC 19D.3.45RRP
A firm must ensure that remuneration packages relating to compensation for, or buy out from, an employee's contracts in previous employment align with its long-term interests including appropriate retention, deferral and performance and clawback arrangements.[Note: article 94(1)(i) of CRD]
SYSC 19D.3.48RRP
A firm must set an appropriate ratio between the fixed and variable components of total remuneration and ensure that:(1) fixed and variable components of total remuneration are appropriately balanced;(2) the level of the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component; and(3) subject to SYSC
SYSC 19D.3.49RRP
A firm may set a higher maximum level of the ratio between the fixed and variable components of total remuneration provided:(1) the overall level of the variable component does not exceed 200% of the fixed component of the total remuneration for each dual-regulated firms Remuneration Code staff; and(2) is approved by the shareholders or owners or members of the firm in accordance with SYSC 19D.3.50R.[Note: article 94(1)(g)(ii) of CRD]
SYSC 19D.3.50RRP
A firm must ensure that any approval by its shareholders or owners or members, for the purposes of SYSC 19D.3.49R, is carried out in accordance with the following procedure: (1) the firm must give reasonable notice to all its shareholders or owners or members of its intention to seek approval of the proposed higher ratio;(2) the firm must make a detailed recommendation to all its shareholders or owners or members that includes:(a) the reasons for, and the scope of, the approval
SYSC 19D.3.51RRP
A firm must notify the FCA without delay of the decisions taken by its shareholders or members or owners including any approved higher maximum ratio.[Note: article 94(1)(g)(ii) of the CRD]
SYSC 19D.3.52RRP
A firm may apply a discount rate to a maximum of 25% of an employee's total variable remuneration provided it is paid in instruments that are deferred for a period of not less than five years.[Note: article 94(1)(g)(iii) of the CRD]
SYSC 19D.3.54RRP
A firm must ensure that payments relating to the early termination of a contract reflect performance achieved over time and are designed in a way that does not reward failure or misconduct.[Note: article 94(1)(h) of the CRD and Standard 12 of the FSB Compensation Standards]
SYSC 19D.3.56RRP
(1) A firm must ensure that a substantial portion, which is at least 50%, of any variable remuneration consists of an appropriate balance of:(a) shares or equivalent ownership interests, subject to the legal structure of the firm concerned, or share-linked instruments or equivalent non-cash instruments in the case of a non-listed firm; and(b) where possible, other instruments that in each case adequately reflect the credit quality of the firm as a going concern and are appropriate
SYSC 19D.3.59RRP
(1) A firm must not award, pay or provide a variable remuneration component unless a substantial portion of it, which is at least 40%, is deferred over a period which is not less than:(a) for dual-regulated firms Remuneration Code staff who do not perform a PRA-designated senior management function, three to five years, with no vesting taking place until one year after the award, and vesting no faster than on a pro-rata basis.(b) for dual-regulated firms Remuneration Code staff
SYSC 19D.3.61RRP
A firm must ensure that:(1) any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the firm as a whole, and justified on the basis of the performance of the firm, the business unit and the individual concerned;(2) any variable remuneration is subject to clawback, such that it is only awarded if an amount corresponding to it can be recovered from the individual by the firm if the recovery is justified
SYSC 19D.3.62RRP
A firm must:(1) set specific criteria for the application of malus and clawback; and(2) ensure that the criteria for the application of malus and clawback in particular cover situations where the employee:(a) participated in, or was responsible for, conduct which resulted in significant losses to the firm; or(b) failed to meet appropriate standards of fitness and propriety.[Note: article 94(1)(n) of the CRD and Standards 6 and 9 of the FSB Compensation Standards][Note: The FSA
SYSC 19A.3.1RRP
(1) A firm must apply the requirements of this section at group, parent undertaking and subsidiary undertaking levels, including those subsidiaries established in a country or territory which is not an EEA State.(2) Paragraph (1) does not limit SYSC 12.1.13 R (2)(dA) (which relates to the application of the Remuneration Code within UK consolidation groups and non-EEA sub-groups).[Note:3article 92(1) of CRD]3
SYSC 19A.3.2GRP
SYSC 12.1.13 R (2)(dA) requires the firm to ensure that the risk management processes and internal control mechanisms at the level of any UK consolidation group or non-EEA sub-group of which a firm is a member comply with the obligations set out in this section on a consolidated (or sub-consolidated) basis. In the FCA’s6 view, the application of6 this section at group, parent undertaking and subsidiary undertaking levels in SYSC 19A.3.1R(1) is in line with6 article 109(2) of
SYSC 19A.3.3RRP
(1) This section applies in relation to Remuneration Code staff, except as set out in (3).(2) When establishing and applying the total remuneration policies for Remuneration Code staff, a firm must comply with this section in a way and to the extent that is appropriate to its size, internal organisation and the nature, the scope and the complexity of its activities (the remuneration principles proportionality rule).(3) Paragraphs (1) and (2) do not apply to the requirement for
SYSC 19A.3.4RRP
(1) Remuneration Code staff comprises:(a) an employee of an IFPRU investment firm whose professional activities have a material impact on the firm’s risk profile, including any employee who is deemed to have a material impact on the firm’s risk profile in accordance with Regulation (EU) 604/2014 of 4 March 2014 (Regulatory technical standards to identify staff who are material risk takers); or(b) subject to (2) and (3), an employee of an overseas firm in SYSC 19A1.1.1R(1)(d) (i.e.,
SYSC 19A.3.7RRP
A firm must ensure that its remuneration policy is consistent with and promotes sound and effective risk management and does not encourage risk-taking that exceeds the level of tolerated risk of the firm.[Note:3article 92(2)(a) of CRD]3
SYSC 19A.3.8RRP
A firm must ensure that its remuneration policy is in line with the business strategy, objectives, values and long-term interests of the firm.[Note:3article 92(2)(b) of CRD]3
SYSC 19A.3.9RRP
A firm must ensure that its remuneration policy includes measures to avoid conflicts of interest.[Note:3article 92(2)(b) of CRD]3
SYSC 19A.3.10RRP
A firm must ensure that its 3management body in its supervisory function adopts and periodically reviews the general principles of the remuneration policy and is responsible for3 overseeing its implementation.3[Note:3article 92(2)(c) of CRD and Standard 1 of the FSB Compensation Standards]3
SYSC 19A.3.11RRP
A firm must ensure that the implementation of the remuneration policy is, at least annually, subject to central and independent internal review for compliance with policies and procedures for remuneration adopted by the 3management body in its supervisory function.3[Note:3article 92(2)(d) of CRD and Standard 1 of the FSB Compensation Standards]3
SYSC 19A.3.12RRP
(1) A6firm that is significant in terms of its size, internal organisation and the nature, the scope and the complexity of its activities must establish a remuneration committee. 3(2) The remuneration committee must be constituted in a way that enables it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital and liquidity.(3) The chairman and the members of the remuneration committee must be
SYSC 19A.3.12ARRP
3A firm that maintains a website must explain on the website how it complies with the Remuneration Code.[Note: article 96 of CRD]
SYSC 19A.3.14RRP
A firm must ensure that employees engaged in control functions:(1) are independent from the business units they oversee;(2) have appropriate authority; and (3) are remunerated:(a) adequately to attract qualified and experienced staff; and(b) in accordance with the achievement of the objectives linked to their functions, independent of the performance of the business areas they control.[Note:3article 92(2)(e) of CRD and Standard 2 of the FSB Compensation Standards]3
SYSC 19A.3.16RRP
A firm must ensure that the remuneration of the senior officers in risk management and compliance functions is directly overseen by the remuneration committee referred to in SYSC 19A.3.12 R, or, if such a committee has not been established, by the governing body in its supervisory function.[Note:3article 92(2)(f) of CRD]3
SYSC 19A.3.18RRP
A firm must ensure that total variable remuneration does not limit the firm's ability to strengthen its capital base.[Note:3article 94(1)(c) of CRD and Standard 3 of the FSB Compensation Standards]3
SYSC 19A.3.20RRP
A firm that benefits from exceptional government intervention must ensure that:(1) variable remuneration is strictly limited as a percentage of net revenues when it is inconsistent with the maintenance of a sound capital base and timely exit from government support;(2) it restructures remuneration in a manner aligned with sound risk management and long-term growth, including when appropriate establishing limits to the remuneration of3members of its management body; and3(3) no
SYSC 19A.3.22RRP
(1) A firm must ensure that any measurement of performance used to calculate variable remuneration components or pools of variable remuneration components:(a) includes adjustments for all types of current and future risks and takes into account the cost and quantity of the capital and the liquidity required; and(b) takes into account the need for consistency with the timing and likelihood of the firm receiving potential future revenues incorporated into current earnings.(2) A
SYSC 19A.3.27RRP
A firm must ensure that its total variable remuneration is generally considerably contracted where subdued or negative financial performance of the firm occurs, taking into account both current remuneration and reductions in payouts of amounts previously earned3, including through malus or clawback arrangements.3[Note:3article 94(1)(n) of CRD and Standard 5 of the FSB Compensation Standards]3
SYSC 19A.3.29RRP
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19A.3.47 R (1); and(3) 3when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19A.3.47
SYSC 19A.3.30RRP
(1) A firm must ensure that its employees undertake not to use personal hedging strategies or remuneration- or liability-related contracts of insurance to undermine the risk alignment effects embedded in their remuneration arrangements.(2) A firm must maintain effective arrangements designed to ensure that employees comply with their undertaking.[Note:3article 94(1)(p) of CRD and Standard 14 of the FSB Compensation Standards]3
SYSC 19A.3.32RRP
A firm must ensure that variable remuneration is not paid through vehicles or methods that facilitate 3non-compliance with the Remuneration Code, the EU CRR or CRD6.3[Note:3article 94(1)(q) of CRD]3
SYSC 19A.3.35ARRP
4A firm must ensure that the remuneration policy makes a clear distinction between criteria for setting:(1) basic fixed remuneration that primarily reflects an employee's professional experience and organisational responsibility as set out in the employee's job description and terms of employment; and(2) variable remuneration that reflects performance in excess of that required to fulfil the employee's job description and terms of employment and that is subject to performance
SYSC 19A.3.36RRP
A firm must ensure that where remuneration is performance-related:(1) the total amount of remuneration is based on a combination of the assessment of the performance of:(a) the individual; (b) the business unit concerned; and (c) the overall results of the firm; and(2) when assessing individual performance, financial as well as non-financial criteria are taken into account.[Note:3article 94(1)(a) of CRD and Standard 6 of the FSB Compensation Standards]3
SYSC 19A.3.38RRP
A firm must ensure that the assessment of performance is set in a multi-year framework in order to ensure that the assessment process is based on longer-term performance and that the actual payment of performance-based components of remuneration is spread over a period which takes account of the underlying business cycle of the firm and its business risks.[Note:3article 94(1)(b) of CRD]3
SYSC 19A.3.40RRP
A firm must ensure that guaranteed variable remuneration is not part of prospective remuneration plans.3 A firm must not award, pay or provide guaranteed variable remuneration unless:3(1) 3it is exceptional;(2) 3it occurs in the context of hiring new Remuneration Code staff;3(3) 3the firm has a sound and strong capital base; and3(4) 3it is limited to the first year of service.[Note:3article 94(1)(d) and (e) of CRD and Standard 11 of the FSB Compensation Standards]3
SYSC 19A.3.40ARRP
3A firm must ensure that remuneration packages relating to compensation for, or buy out from, an employee's contracts in previous employment align with the long term interests of the firm and are subject to appropriate retention, deferral and performance and clawback arrangements.[Note: article 94(1)(i) of CRD]
SYSC 19A.3.44RRP
A firm must set an 5appropriate ratio 5between the fixed and variable components of total remuneration and ensure that:(1) fixed and variable components of total remuneration are appropriately balanced;3(2) the level of the 5fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component3; and3(3) subject
SYSC 19A.3.44ARRP
3A firm may set a higher maximum level of the 5ratio between the fixed and variable components of total remuneration provided:555(1) the overall level of the variable component does not exceed 200% of the fixed component of the total remuneration for each Remuneration Code staff; and55(2) is approved by the shareholders or owners or members of the firm in accordance with SYSC 19A.3.44B R.[Note: article 94(1)(g)(ii) of CRD]
SYSC 19A.3.44BRRP
A firm must ensure that any approval by the its shareholders or owners or members for the purposes of SYSC 19A.3.44AR is carried out in accordance with the following procedure:535(1) the firm must give reasonable notice to all its shareholders or owners or members of its intention to seek approval of the proposed higher ratio;55(2) the firm must make a detailed recommendation to all its shareholders or owners or members that includes:(a) the reasons for, and the scope of, the
SYSC 19A.3.44CRRP
3A firm must notify without delay the FCA6 of the decisions taken by its shareholders or members or owners including any approved higher maximum ratio.[Note: article 94(1)(g)(ii) of CRD]
SYSC 19A.3.44DRRP
3A firm may apply a discount rate to a maximum of 25% of an employee's total variable remuneration provided it is paid in instruments that are deferred for a period of not less than five years.[Note: article 94(1)(g)(iii) of CRD]
SYSC 19A.3.45RRP
A firm must ensure that payments 3relating to the early termination of a contract reflect performance achieved over time and are designed in a way that does not reward failure3or misconduct.3[Note:3article 94(1)(h) of CRD and Standard 12 of the FSB Compensation Standards]3
SYSC 19A.3.47RRP
(1) A firm must ensure that a substantial portion, which is at least 50%, of any variable remuneration consists of an appropriate balance of:(a) shares or equivalent ownership interests, subject to the legal structure of the firm concerned, or share-linked instruments or equivalent non-cash instruments in the case of a non-listed firm; and(b) 3where possible other instruments which are eligible as Additional Tier 1 instruments or are eligible as Tier 2 instruments or other instruments
SYSC 19A.3.49RRP
(1) A firm must not award, pay or provide a variable remuneration component unless a substantial portion of it, which is at least 40%, is deferred over a period which is not less than three to five years.(2) Remuneration under (1) must vest no faster than on a pro-rata basis. (3) In the case of a variable remuneration component: (a) of £500,000 or more;6 or(b) payable to a director of a firm that is significant in terms of its size, internal organisation and the nature, scope
SYSC 19A.3.51RRP
A firm must ensure that any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the firm as a whole, and justified on the basis of the performance of the firm, the business unit and the individual concerned.3[Note:article 94(1)(n) of CRD3]
SYSC 19A.3.51ARRP
3A firm must:(1) ensure that any of the total variable remuneration is subject to malus or clawback arrangements;(2) set specific criteria for the application of malus and clawback; and(3) ensure that the criteria for the application of malus and clawback in particular cover situations where the employee: (a) participated in or was responsible for conduct which resulted in significant losses to the firm;(b) failed to meet appropriate standards of fitness and propriety.[Note: article
IFPRU 2.2.7RRP
A firm must have in place sound, effective and comprehensive strategies, processes and systems:(1) to assess and maintain, on an ongoing basis, the amounts, types and distribution of financial resources, own funds and internal capital that it considers adequate to cover:(a) the nature and level of the risks to which it is, or might be, exposed;(b) the risk in the overall financial adequacy rule;(c) the risk that the firm might not be able to meet the obligations in Part Three
IFPRU 2.2.12RRP
The processes, strategies and systems required by the overall Pillar 2 rule must be comprehensive and proportionate to the nature, scale and complexity of the firm's activities.[Note: article 73 second paragraph (part) of CRD]
IFPRU 2.2.13RRP
A firm must:(1) carry out regularly the assessments required by the overall Pillar 2 rule; and(2) carry out regular assessments of the processes, strategies and systems required by the overall Pillar 2 rule to ensure that they remain comprehensive and proportionate to the nature, scale and complexity of the firm's activities.[Note: article 73 second paragraph (part) of CRD]
IFPRU 2.2.17RRP
A firm must base credit-granting on sound and well-defined criteria and clearly establish the process for approving, amending, renewing and re-financing credits. [Note: article 79(a) of CRD]
IFPRU 2.2.18RRP
A firm must have internal methodologies that:(1) enable it to assess the credit risk of exposures to individual obligors, securities or securitisation positions and credit risk at the portfolio level;(2) do not rely solely or mechanistically on external credit ratings;(3) where its own funds requirements under Part Three of the EUCRR (Capital Requirements) are based on a rating by an ECAI or based on the fact that an exposure is unrated, enable the firm to consider other relevant
IFPRU 2.2.19RRP
A firm must operate through effective systems the ongoing administration and monitoring of its various credit risk-bearing portfolios and exposures, including for identifying and managing problem credits and for making adequate value adjustments and provisions.[Note: article 79(c) of CRD]
IFPRU 2.2.20RRP
A firm must adequately diversify credit portfolios given its target markets and overall credit strategy.[Note: article 79(d) of CRD]
IFPRU 2.2.21RRP
A firm must address and control, by means which include written policies and procedures, residual risk (see IFPRU 2.2.8 R (2) and IFPRU 2.3.41 G). [Note: article 80 of CRD]
IFPRU 2.2.22RRP
A firm must address and control, by means which include written policies and procedures, the concentration risk arising from:(1) exposures to each counterparty, including central counterparties, groups of connected counterparties and counterparties in the same economic sector, geographic region or from the same activity or commodity;(2) the application of credit risk mitigation techniques; and(3) risks associated with large indirect credit exposures, such as a single collateral
IFPRU 2.2.24RRP
A firm must evaluate and address through appropriate policies and procedures the risks arising from securitisation transactions in relation to which a firm is investor, originator or sponsor, including reputational risks, to ensure, in particular, that the economic substance of the transaction is fully reflected in risk assessment and management decisions.[Note: article 82(1) of CRD]
IFPRU 2.2.25RRP
A firm which is an originator of a revolving securitisation transaction involving early amortisation provisions must have liquidity plans to address the implications of both scheduled and early amortisation.[Note: article 82(2) of CRD]
IFPRU 2.2.26RRP
A firm must implement policies and processes for the identification measurement and management of all material sources and effects of market risks. [Note: article 83(1) of CRD]
IFPRU 2.2.27RRP
A firm must take measures against the risk of a shortage of liquidity if the short position falls2 due before the long position.[Note: article 83(2) of CRD]
IFPRU 2.2.28RRP
(1) A firm's financial resources and internal capital must be adequate for material market risk that are not subject to an own funds requirement under Part Three of the EUCRR (Capital Requirements).(2) A firm which has, in calculating own funds requirements for position risk in accordance with Part Three, Title IV, Chapter 2 of the EU CRR (Own funds requirements for position risk), netted off its positions in one or more of the equities constituting a stock-index against one
IFPRU 2.2.29RRP
As part of its obligations under the overall Pillar 2 rule, a firm must consider whether the value adjustments and provisions taken for positions and portfolios in the trading book enable the firm to sell or hedge out its positions within a short period without incurring material losses under normal market conditions. [Note: article 98(4) of CRD]
IFPRU 2.2.30RRP
A firm must implement systems to identify, evaluate and manage the risk arising from potential changes in interest rates that affect a firm's non-trading activities.[Note: article 84 of CRD]
IFPRU 2.2.31RRP
(1) As part of its obligations under the overall Pillar 2 rule, a firm must carry out an evaluation of its exposure to the interest-rate risk arising from its non-trading activities.(2) The evaluation under (1) must cover the effect of a sudden and unexpected parallel change in interest rates of 200 basis points in both directions.(3) A firm must immediately notify the FCA if any evaluation under this rule suggests that, as a result of the change in interest rates described in
IFPRU 2.2.32RRP
A firm must implement policies and processes to evaluate and manage the exposure to operational risk, including model risk and to cover low-frequency high severity events. Without prejudice to the definition of operational risk, a firm must articulate what constitutes operational risk for the purposes of those policies and procedures.[Note: article 85(1) of CRD]
IFPRU 2.2.33RRP
A firm must have adequate contingency and business continuity plans in place aimed at ensuring that, in the case of a severe business disruption, the firm is able to operate on an ongoing basis and that any losses are limited.[Note: article 85(2) of CRD]
IFPRU 2.2.34RRP
(1) A firm must have policies and procedures in place for the identification, management and monitoring of the risk of excessive leverage.(2) Those policies and procedures must include, as an indicator for the risk of excessive leverage, the leverage ratio determined in accordance with article 429 of the EU CRR (Calculation of the leverage ratio) and mismatches between assets and obligations.[Note: article 87(1) of CRD]
IFPRU 2.2.35RRP
A firm must address the risk of excessive leverage in a precautionary manner by taking due account of potential increases in that risk caused by reductions of the firm'sown funds through expected or realised losses, depending on the applicable accounting rules. To that end, a firm must be able to withstand a range of different stress events with respect to the risk of excessive leverage.[Note: article 87(2) of CRD]
IFPRU 2.2.37RRP
(1) As part of its obligation under the overall Pillar 2 rule, a firm that is a significant IFPRU firm must:(a) for the major sources of risk identified in line with IFPRU 2.2.7R(2), carry out stress tests and scenario analyses that are appropriate to the nature, scale and complexity of those major sources of risk and to the nature, scale and complexity of the firm's business; and(b) carry out the reverse stress testing under SYSC 20 (Reverse stress testing).(2) In carrying out
IFPRU 2.2.46RRP
A firm that is not a member of a FCAconsolidation group must apply the ICAAPrules on an individual basis. [Note: article 108(1) of CRD]
IFPRU 2.2.47RRP
A firm which is a parent institution in a Member State must comply with the ICAAPrules on a consolidated basis. [Note: article 108(2) of CRD]
IFPRU 2.2.48RRP
A firm controlled by a parent financial holding company in a Member State or a parent mixed financial holding company in a Member State must comply with the ICAAPrules on the basis of the consolidated situation of that holding company, if the FCA is responsible for supervision of the firm on a consolidated basis under article 111 of CRD. [Note: article 108(3) of CRD]
IFPRU 2.2.49RRP
A firm that is a subsidiary must apply the ICAAPrules on a sub-consolidated basis if the firm, or the parent undertaking where it is a financial holding company or mixed financial holding company, have an institution or financial institution or an asset management company as a subsidiary in a third country or hold a participation in such an undertaking as members of a non-EEA sub-group. [Note: article 108(4) of CRD]
IFPRU 2.2.58RRP
The risk control rules apply to a firm on an individual basis whether or not they also apply to the firm on a consolidated basis.[Note: article 109(1) of CRD]
IFPRU 2.2.59RRP
Where a firm is a member of a FCA consolidation group or a non-EEA sub-group, the firm must ensure that the risk management processes and internal control mechanisms at those levels comply with the obligations set out in the risk control rules on a consolidated basis (or a sub-consolidated basis).[Note: article 109(2) of CRD]
IFPRU 2.2.60RRP
Compliance with the obligations in IFPRU 2.2.59 R must enable the FCA consolidation group or the non-EEA sub-group to have arrangements, processes and mechanisms that are consistent, well integrated and ensure that data relevant to the purpose of supervision can be produced.[Note: article 109(2) of CRD]
SYSC 4.3A.1RRP
1A common platform firm4 must ensure that the management body defines, oversees and is accountable for the implementation of governance arrangements that ensure effective and prudent management of the firm, including the segregation of duties in the organisation and the prevention of conflicts of interest, and in a manner that promotes the integrity of the market and the interests of clients4. The firm must ensure that the management body:(1) has overall responsibility for the
SYSC 4.3A.2RRP
A common platform firm4 must ensure that the chairman of the firm's management body does not exercise simultaneously the PRA’s Chief Executive function (controlled function SMF14) or 3chief executive function within the same firm4.[Note: article 88(1)(e) of CRD and article 9(1) of MiFID4] 3
SYSC 4.3A.3RRP
A common platform firm4 must ensure that the members of the management body of the firm: (1) are of sufficiently good repute;(2) possess sufficient knowledge, skills and experience to perform their duties;(3) possess adequate collective knowledge, skills and experience to understand the firm's activities, including the main risks;(4) reflect an adequately broad range of experiences; (5) commit sufficient time to perform their functions in the firm; and(6) act with honesty, integrity
SYSC 4.3A.4RRP
A common platform firm4 must devote adequate human and financial resources to the induction and training of members of the management body.[Note: article 91(9) of CRD and article 9(1) of MiFID4]
SYSC 4.3A.5RRP
A common platform firm4 must ensure that the members of the management body of the firm do not hold more directorships than is appropriate taking into account individual circumstances and the nature, scale and complexity of the firm's activities.[Note: article 91(3) of CRD and article 9(1) of MiFID4]
SYSC 4.3A.6RRP
2(1) A common platform firm4 that is significant must ensure that the members of the management body of the firm do not hold more than one of the following combinations of directorship in any organisation at the same time:(a) one executive directorship with two non-executive directorships; and(b) four non-executive directorships. (2) Paragraph (1) does not apply to members of the management body that represent the United Kingdom.[Note: article 91(3) of CRD and article 9(1)
SYSC 4.3A.7RRP
For the purposes of SYSC 4.3A.5 R and SYSC 4.3A.6 R:(1) directorships in organisations which do not pursue predominantly commercial objectives shall not count; and(2) the following shall count as a single directorship:(a) executive or non-executive directorships held within the same group; or(b) executive or non-executive directorships held within:(i) firms that are members of the same institutional protection scheme provided that the conditions set out in article 113(7) of the
SYSC 4.3A.8RRP
A common platform firm4 that is significant must:(1) establish a nomination committee composed of members of the management body who do not perform any executive function in the firm;(2) ensure that the nomination committee is able to use any forms of resources the nomination committee deems appropriate, including external advice; and(3) ensure that the nomination committee receives appropriate funding. [Note: article 88(2) of CRD and article 9(1) of MiFID4]
SYSC 4.3A.9RRP
A common platform firm4 that has a nomination committee must ensure that the nomination committee:(1) engages 4a broad set of qualities and competences when recruiting members to the management body and for that purpose puts in place a policy promoting diversity on the management body; (2) identifies and recommends for approval, by the management body or by general meeting, candidates to fill management body vacancies, having evaluated the balance of knowledge, skills, diversity
SYSC 4.3A.10RRP
A common platform firm4 that does not have a nomination committee must engage a broad set of qualities and competences when recruiting members to the management body. For that purpose a common platform firm4 that does not have a nomination committee must put in place a policy promoting diversity on the management body.[Note: article 91(10) of CRD and article 9(1) of MiFID4]
SYSC 4.3A.11RRP
A CRR firm that maintains a website must explain on the website how it complies with the requirements of SYSC 4.3A.1 R to SYSC 4.3A.3 R and SYSC 4.3A.4 R to SYSC 4.3A.11 R.[Note: article 96 of CRD]
SYSC 7.1.4RRP
The management body13 of a common platform firm must approve and periodically review the strategies and policies for taking up, managing, monitoring and mitigating the risks the firm is or might be exposed to, including those posed by the macroeconomic environment in which it operates in relation to the status of the business cycle.[Note: 13article 76(1) of CRD]1313
SYSC 7.1.17RRP
(1) 13The management body of a CRR firm has overall responsibility for risk management. It must devote sufficient time to the consideration of risk issues.(2) The management body of a CRR firm must be actively involved in and ensure that adequate resources are allocated to the management of all material risks addressed in the rules implementing the CRD and in the EU CRR as well as in the valuation of assets, the use of external ratings and internal models related to those risks.
SYSC 7.1.18RRP
(1) 13A CRR firm that is significant must establish a risk committee composed of members of the management body who do not perform any executive function in the firm. Members of the risk committee must have appropriate knowledge, skills and expertise to fully understand and monitor the risk strategy and the risk appetite of the firm.(2) The risk committee must advise the management body on the institution’s overall current and future risk appetite and assist the management body
SYSC 7.1.18AAGRP
15A CRR firm which is not a significant IFPRU firm may combine the risk committee with the audit committee.[Note: article 76(3) of CRD]
SYSC 7.1.18BRRP
15Members of the combined risk and audit committee must have the knowledge, skills and expertise required for both committees.[Note: article 76(3) of CRD]
SYSC 7.1.19RRP
(1) 13A CRR firm must ensure that the management body in its supervisory function and, where a risk committee has been established, the risk committee have adequate access to information on the risk profile of the firm and, if necessary and appropriate, to the risk management function and to external expert advice.(2) The management body in its supervisory function and, where one has been established, the risk committee must determine the nature, the amount, the format, and the
SYSC 7.1.20RRP
13In order to assist in the establishment of sound remuneration policies and practices, the risk committee must, without prejudice to the tasks of the remuneration committee, examine whether incentives provided by the remuneration system take into consideration risk, capital, liquidity and the likelihood and timing of earnings.[Note: article 76(4) of CRD]
SYSC 7.1.21RRP
(1) 13A CRR firm's risk management function (article 23 of the MiFID Org Regulation19) must be independent from the operational functions and have sufficient authority, stature, resources and access to the management body.(2) The risk management function must ensure that all material risks are identified, measured and properly reported. It must be actively involved in elaborating the firm's risk strategy and in all material risk management decisions and it must be able to deliver
SYSC 7.1.22RRP
13The head of the risk management function must be an independent senior manager with distinct responsibility for the risk management function. Where the nature, scale and complexity of the activities of the CRR firm do not justify a specially appointed person, another senior person within the firm may fulfil that function, provided there is no conflict of interest. The head of the risk management function must not be removed without prior approval of the management body and must
BIPRU 12.3.4RRP
A firm must have in place robust strategies, policies, processes and systems that enable it to identify, measure, manage and monitor liquidity risk over an appropriate set of time horizons, including intra-day, so as to ensure that it maintains adequate levels of liquidity buffers. These strategies, policies, processes and systems must be tailored to business lines, currencies, branches4 and legal4 entities and must include adequate allocation mechanisms of liquidity costs, benefits
BIPRU 12.3.5RRP
The strategies, policies, processes and systems referred to in BIPRU 12.3.4 R must be proportionate to the complexity, risk profile and scope of operation of the firm, and the liquidity risk tolerance set by the firm'sgoverning body in accordance with BIPRU 12.3.8 R, and must reflect the firm's importance in each EEA State, in which it carries on business2.[Note: article 86(2) (part) of the CRD]42
BIPRU 12.3.7ARRP
4A firm must, taking into account the nature, scale and complexity of its activities, have liquidity risk profiles that are consistent with and not in excess of those required for a well-functioning and robust system.[Note: article 86(3) of the CRD]
BIPRU 12.3.8RRP
A firm must ensure that:(1) its governing body establishes that firm'sliquidity risk tolerance and that this is appropriately documented;2(2) its liquidity risk tolerance is appropriate for its business strategy and reflects its financial condition and funding capacity; and2(3) its liquidity risk tolerance is communicated to all relevant business lines.2[Note: article 86(2) of the CRD]425
BIPRU 12.3.22ARRP
2A firm must distinguish between pledged and unencumbered assets that are available at all times, in particular during emergency situations. A firm must also take into account the legal entity in which assets reside, the country where assets are legally recorded either in a register or in an account as well as their eligibility and must monitor how assets can be mobilised in a timely manner.[Note: article 86(5) of the CRD]4
BIPRU 12.3.22BRRP
2A firm must also have regard to existing legal, regulatory and operational limitations to potential transfers of liquidity and unencumbered assets amongst entities, both within and outside the EEA.[Note: article 86(6) of the CRD]4
BIPRU 12.3.27RRP
A firm must develop methodologies for the identification, measurement, management and monitoring of funding positions. Those methodologies must include the current and projected material cash-flows in and arising from assets, liabilities, off-balance-sheet items, including contingent liabilities and the possible impact of reputational risk.22[Note: article 86(4) of the CRD]4
BIPRU 12.4.-2RRP
2A firm must consider different liquidity risk mitigation tools, including a system of limits and liquidity buffers in order to be able to withstand a range of different stress events and an adequately diversified funding structure and access to funding sources. Those arrangements must be reviewed regularly.[Note: article 86(7) of the CRD]4
BIPRU 12.4.-1RRP
2A firm must consider alternative scenarios on liquidity positions and on risk mitigants and must review the assumptions underlying decisions concerning the funding position at least annually4. For these purposes, alternative scenarios must address, in particular, off-balance sheet items and other contingent liabilities, including those of securitisation special purpose entities(SSPEs) or other special purpose entities, as referred to in the EUCRR,4 in relation to which the firm
BIPRU 12.4.5ARRP
2A firm must consider the potential impact of institution-specific, market-wide and combined alternative scenarios. Different time periods4and varying degrees of stressed conditions must be considered.42[Note: article 86(9) of the CRD]4
BIPRU 12.4.10RRP
A firm must adjust its strategies, internal policies and limits on liquidity risk and develop an effective contingency funding plan, taking into account the outcome of the alternative scenarios referred to in BIPRU 12.4.-1 R.2[Note: article 86(10) of the CRD]42
BIPRU 12.4.11RRP
A4firm must have in place liquidity recovery4plans setting out adequate strategies and proper implementation measures in order to address possible liquidity shortfalls, including in relation to branches established in another EEA State.4 Those plans must be tested at least annually,4 updated on the basis of the outcome of the alternative scenarios set out in BIPRU 12.4.-1 R, and be reported to and approved by the firm'sgoverning body, so that internal policies and processes can
IFPRU 1.3.1RRP
Except for operational risk, a firm that is permitted to use internal approaches for the calculation of risk weighted exposure amounts or own fund requirements must report annually to the FCA: (1) the results of the calculations of its internal approaches for its exposures or positions that are included in the benchmark portfolios; and(2) an explanation of the methodologies used to produce those calculations in (1).[Note: article 78(1) of CRD]
IFPRU 1.3.2GRP
A firm must submit the results of the calculations referred to in IFPRU 1.3.1 R (1), in line with the template set out in the Commission Regulation adopted under article 78(8) of CRD, to the FCA and to EBA.
IFPRU 1.3.3RRP
Where the FCA has chosen to develop specific portfolios in accordance with article 78(2) of CRD, a firm must report the results of the calculations separately from the results of the calculations for EBA portfolios. [Note: article 78(2) of CRD]
IFPRU 10.3.1RRP
A firm must calculate a countercyclical capital buffer of common equity tier 1 capital equal to its total risk exposure amount multiplied by the weighted average of the countercyclical buffer rates that apply to exposures in the jurisdictions where the firm'srelevant credit exposures are located. [Note: article 130(1) (part) of CRD]
IFPRU 10.3.2RRP
(1) To calculate the weighted average in IFPRU 10.3.1 R, a firm must apply to each applicable countercyclical buffer rate its total own funds requirements for credit risk, specific risk, incremental default and migration risk that relates to the relevant credit exposures in the jurisdiction in question, divided by its total own funds requirements for credit risk that relates to all of its relevant credit exposures.(2) For the purposes of (1), a firm must calculate its total own
IFPRU 10.3.3GRP
A firm must identify the geographical location of a relevant credit exposure in accordance with the regulatory technical standards adopted under article 140(7) of CRD. [Note: article 140(5) of CRD]
IFPRU 3.1.4GRP
This section implements EC standards for the base own funds requirement to be held by an IFPRU investment firm. In particular, it implements articles 28 and 29 of CRD.
IFPRU 3.1.6RRP
(1) Subject to (2), an IFPRU investment firm must maintain, at all times, common equity tier 1 capital equal to, or in excess of, the base own funds requirement. (2) For the purpose of (1), the common equity tier 1 capital of an IFPRU investment firm must comprise only of one or more of the items referred to in article 26(1)(a) to (e) of the EU CRR (Common equity tier 1 items).[Note: article 28(1) of CRD]
IFPRU 3.1.9RRP
This table belongs to IFPRU 3.1.8 R.Firm CategoryAmount: Currency equivalent ofIFPRU 730K firm€730,000 IFPRU 125K firm€125,000IFPRU 50K firm€50,000[Note: articles 28(2), 29(1) and 29(3) of CRD]
IFPRU 1.1.4GRP
(1) The purpose of IFPRU is to implement, in part, CRD and certain national discretions afforded to the FCA as competent authority under EU CRR.(2) Save as provided in the Glossary, any expression in the Handbook for the purpose of IFPRU which is defined or used in EU CRR shall have the meaning given by, or used in, those Regulations.
IFPRU 1.1.9RRP
An IFPRU 125K firm means an IFPRU investment firm that satisfies the following conditions:(1) it does not:(a) deal on own account; or (b) underwrite issues of financial instruments (as referred to in Section A of Annex I of MiFID) on a firm commitment basis;(2) it holds clients' money or securities for investment services it provides or is authorised to do so;(3) it offers one or more of the following services (all as referred to in Section A of Annex I of MiFID):(a) reception
IFPRU 1.1.10RRP
An IFPRU 50K firm is a IFPRU investment firm that satisfies the following conditions:(1) the conditions in IFPRU 1.1.9 R(1) and (3);(2) it does not hold clients' money or securities for investment services it provides and is not authorised to do so;(3) it is not a collective portfolio management investment firm; and(4) it does not operate either2 a multilateral trading facility or an organised trading facility, or both2.[Note: article 29(3) of CRD]
IFPRU 1.1.11RRP
(1) An IFPRU investment firm that is not a collective portfolio management investment firm, an IFPRU 125K firm or an IFPRU 50K firm is an IFPRU 730K firm. (2) An IFPRU investment firm that operates either2 a multilateral trading facility or an organised trading facility or both2 is an IFPRU 730K firm.[Note: article 28(2) of CRD]
IFPRU 1.1.12RRP
(1) For the purpose of IFPRU and the EU CRR, dealing on own account means the service of dealing in any financial instruments for own account as referred to in point 3 of Section A of Annex I to MiFID, subject to (2) and (3).(2) In accordance with article 29(2) of CRD (Definition of dealing on own account), an investment firm that executes investors' orders for financial instruments and holds such financial instruments for its own account does not, for that reason, deal on own
SUP 14.1.1GRP
1This chapter applies to an incoming EEA firm15 which has established a branch in, or is providing cross border services into, the United Kingdom under one of the Single Market Directives or the auction regulation8 and, therefore, qualifies for authorisation under Schedule 3 to the Act. The chapter does not apply to an EEA firm that is a Solvency II firm or to Gibraltar firms treated as such Solvency II firms. Solvency II firms and such Gibraltar firms should consult the relevant
SUP 14.1.3GRP
(1) Under the Gibraltar Order4 made under section 409 of the Act, a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:(a) [deleted]151313(aa) [deleted]1313(b) authorised in Gibraltar under the9CRD; or;494(c) authorised in Gibraltar under the IDD16; or4(d) authorised in Gibraltar under MiFID; or1010(e) authorised in Gibraltar under the UCITS Directive; or1210(f) authorised in Gibraltar under AIFMD.12(g) authorised in Gibraltar under the MCD14(1A) 4Similarly,
SUP 14.1.4GRP
This chapter gives guidance on the Act and the EEA Passport Rights Regulations made under the Act, for an incoming EEA firm which has established a branch in, or is providing cross border services into, the United Kingdom and wishes to change the details of the branch or cross border services. [Note: An EEA bank is required to comply with the requirements set out in the directly applicable regulations adopted under Articles 35, 36 and 39 CRD.] 95
SUP 14.1.7GRP
In addition, the chapter does not give guidance on the procedures for making an application for top-up permission, to carry on regulated activities in the United Kingdom which are outside the scope of the Single Market Directives and for which the firm cannot exercise Treaty rights. Incoming EEA firms seeking a top-up permission should refer to 3SUP 13A3.
SUP App 3.3.2GRP
The Treaty provides the framework for the provision of banking, insurance business, investment business, UCITS management services and insurance mediation1, while the Single Market Directives clarify the rights and freedoms within that framework.1
SUP App 3.3.6GRP
1(1) The European Commission has not produced an interpretative communication on MiFID3. It is arguable, however, that the principles in the communication on the Second Banking Directive can be applied to investment services and activities3. This is because Chapter9 II of Title II of MiFID3 (containing provisions relating to operating conditions for investment firms3) also applies to the investment services and activities3 of firms operating under the Banking Consolidation Directive,
SUP App 3.3.10GRP
The E-Commerce Directive does not affect the responsibilities of Home State under the Single Market Directives. This includes the obligation of a Home State regulator to notify the Host State regulator of a firm's intention to establish a branch in, or provide cross border services into, the other EEA State.
SUP App 3.3.13GRP
1The Single Market Directives require credit institutions, insurance undertakings (other than reinsurance undertakings)5, MiFID investment firms3, AIFMs, 7UCITS management companies,8insurance intermediaries and MCD credit intermediaries8 to make a notification to the Home State before establishing a branch or providing cross border services.SUP 13.5 (Notices of intention) sets out the notification requirements for a firm seeking to establish a branch or provide cross border services.
SUP App 3.6.3GRP
Under the Single Market Directives, however, EEA rights for the provision of services are concerned only with services provided in one of the ways referred to in SUP App 3.6.2 G (1) and (2) (How services may be provided).2
SUP App 3.6.5GRP
In the opinion of the European Commission (and in the wording of the Single Market Directives) "only activities carried on within the territory of another Member State should be the subject of prior notification" (Commission interpretative communication: Freedom to provide services and the interests of the general good in the Second Banking Directive (97/C 209/04)). In determining, for the purposes of notification, whether a service is to be provided 'within' another EEA State,
SUP App 3.6.11GRP
The key distinction in relation to temporary activities is whether a firm should make its notification under the freedom of establishment in a Host State, or whether it should notify under the freedom to provide services into a Host State. It would be inappropriate to discuss such a complex issue in guidance of this nature. It is recommended that, where a firm is unclear on the distinction, it should seek appropriate advice. In either case, where a firm is carrying on activities
SUP App 3.6.15GRP
The FCA considers5 that, in order to comply with Principle 3:Management and control (see PRIN 2.1.1 R), a firm should have appropriate procedures to monitor the nature of the services provided to its customers. Where a UK firm has non-resident customers but has not notified the EEA State in which the customers are resident that it wishes to exercise its freedom to provide services, the FCA5 would expect the firm's systems to include appropriate controls. Such controls would
CASS 7.13.3RRP
A firm, on receiving any client money, must promptly place this money into one or more accounts opened with any of the following: (1) a central bank;(2) a CRD credit institution;(3) a bank authorised in a third country6; (4) a qualifying money market fund.[Note: article 4(1) of the MiFID Delegated Directive6]
CASS 7.13.8RRP
(1) A firm that does not deposit client money with a central bank must exercise all due skill, care and diligence in the selection, appointment and periodic review of the CRD credit institution, bank or qualifying money market fund where the money is deposited and the arrangements for the holding of this money. 6(2) The firm must consider the need for diversification as part of its due diligence under (1).6[Note: article 4(2) first sub-paragraph of the MiFID Delegated Directi
CASS 7.13.9GRP
Firms should ensure that their consideration of a CRD credit institution, bank or qualifying money market fund under CASS 7.13.8 R focuses on the specific legal entity in question and not simply that person's group as a whole.
CASS 7.13.10RRP
When a firm makes the selection, appointment and conducts the periodic review of a CRD credit institution, a bank or a qualifying money market fund, it must take into account:(1) the expertise and market reputation of the third party with a view to ensuring the protection of clients’ rights6; and(2) any legal or regulatory6 requirements or market practices related to the holding of client money that could adversely affect clients' rights. [Note: article 4(2) second sub-paragraph
CASS 7.13.11GRP
In complying with CASS 7.13.8 R and CASS 7.13.10 R, a firm should consider, as appropriate, together with any other relevant matters:(1) the capital of the CRD credit institution or bank;(2) the amount of client money placed, as a proportion of the CRD credit institution or bank's capital and deposits, and, in the case of a qualifying money market fund, compared to any limit the fund may place on the volume of redemptions in any period;(3) the extent to which client money that
CASS 7.13.21RRP
For the purpose of CASS 7.13.20 R an entity is a relevant group entity if it is:(1) (a) a CRD credit institution; or 6(b) a bank authorised in a third country; or6(c) a qualifying money market fund; or6(d) the entity operating or managing the qualifying money market fund; and6(2) a member of the same group as that firm. [Note: article 4(3) first sub-paragraph of the MiFID Delegated Directive]6
IFPRU 10.5.1RRP
When a firm does not meet the combined buffer, it must prepare a capital conservation plan and submit it to FCA no later than five business days after the firm identified that it did not meet the combined buffer. [Note: article 142(1) of CRD]
IFPRU 10.5.2RRP
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]
SUP 13A.2.1GRP
A person will only be an EEA firm or a Treaty firm if it has its head office in an EEA State other than the United Kingdom. EEA firms and Treaty firms are entitled to exercise both the right of establishment and the freedom to provide services under the Treaty. The difference, however, is that an EEA firm has a right to passport under a Single Market Directive or the auction regulation2, whereas a Treaty firm carries on activities for which the right to carry on those activities
SUP 13A.2.2GRP
An EEA firm may passport those activities which fall within the scope of the relevant Single Market Directive or the auction regulation2 as long as they are included in its Home State authorisation.
BIPRU 8.7.25RRP
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-EEA sub-group 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 8.7.34RRP
A firm may calculate the risk capital requirement for an institution in the firm'sUK consolidation group or non-EEA sub-group that is an EEA firm in accordance with the CRD implementation measures in the EEA firm'sEEA State that correspond to the appropriate regulator'srules that would otherwise apply under this section if the institution is subject to those CRD implementation measures.
BIPRU 8.7.37RRP
(1) This rule applies if:(a) a firm is applying an accounting consolidation approach to part of its UK consolidation group or non-EEA sub-group under method three as described in BIPRU 8.7.13R (4)(a); and(b) the part of the group in (a) constitutes the whole of a group subject to the consolidated capital requirements of a competent authority under the CRD implementation measures relating to consolidation under the Banking Consolidation Directive or the Capital Adequacy Directive.(2)
IFPRU 10.4.1RRP
A firm does not meet the combined buffer if the common equity tier 1 capital maintained by the firm which is not used to meet the own funds requirement under article 92(1)(c) of the EU CRR (Total capital ratio) does not meet the combined buffer.[Note: articles 129(1) (part) and 130(5) (part) of CRD]
IFPRU 10.4.2RRP
A firm that meets the combined buffer must not make a distribution in connection with common equity tier 1 capital to an extent that would decrease its common equity tier 1 capital to a level where the combined buffer is no longer met.[Note: article 141(1) of CRD]
IFPRU 10.4.3RRP
(1) A firm that does not meet the combined buffer must:(a) calculate the MDA in accordance with (4); and (b) report the MDA to the FCA in writing no later than five business days after the firm identified that it did not meet the combined buffer. (2) A firm that does not meet the combined buffer must not undertake any of the following actions before it has calculated the MDA:(a) make a distribution in connection with common equity tier 1 capital;(b) create an obligation to pay
IPRU-INV 9.2.4RRP
(1) An exempt CAD firm which is not an IDD insurance intermediary3 must have: (a) initial capital of EUR 50,000; or (b) professional indemnity insurance covering the whole territory of the EEA or some other comparable guarantee against liability arising from professional negligence, representing at least EUR 1,000,000 applying to each claim and in aggregate EUR 1,500,000 per year for all claims; or (c) a combination of initial capital and professional
IPRU-INV 9.2.5RRP
(1) An exempt CAD firm that is also an IDD insurance intermediary3 must comply with the professional indemnity insurance requirements at least equal to those set out in IPRU-INV 9.2.4R(1)(b)2 (except that the minimum limits of indemnity are at least EUR 1,250,000 for a single claim and EUR 1,850,0003 in aggregate) and in addition has to have: (a) initial capital of EUR 25,000; or (b) professional indemnity insurance covering the whole territory of the
IPRU-INV 9.2.8RRP
A local firm must: (a) have initial capital of EUR 50,000; and [Note: 2article 30 of the CRD] (b) maintain own funds calculated in accordance with the rules relating to own funds in 9.5, at least to the requirement for initial capital.