Related provisions for BIPRU 7.1.1

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GENPRU 2.2.1RRP
This section applies to a BIPRU firm18.
GENPRU 2.2.4GRP
This section also implements minimum EC standards for the composition of capital resources required to be held by a BIPRU firm. In particular it implements the third paragraph of article 95(2) of the EU CRR, applying16 Articles 56 – 61, Articles 63 – 64, Article 66 and Articles 120 – 122 of the Banking Consolidation Directive (2006/48/EC) and Articles 12 – 16, Article 17 (in part), Article 22(1)(c) (in part) and paragraphs 13 - 15 of Part B of Annex VII of the Capital Adequacy
GENPRU 2.2.6GRP
This table belongs to GENPRU 2.2.5 GTopicLocation of textApplication and purpose of the rules in this sectionGENPRU 2.2.1 R to GENPRU 2.2.4 GBIPRU firms that only have simple types of capital resources (simple capital issuers)GENPRU 2.2.7 GPrinciples underlying the definition of capital resourcesGENPRU 2.2.8 GWhich method of calculating capital resources applies to which type of firmGENPRU 2.2.17 R to GENPRU 2.2.19 RPurpose of the limits on the use of different forms of capitalGENPRU
GENPRU 2.2.7GRP
Parts of this section are irrelevant to a BIPRU firm whose capital resources consist of straightforward capital instruments. 232
GENPRU 2.2.9GRP
Tier one capital typically has the following characteristics:(1) it is able to absorb losses;(2) it is permanent or (in the case of a BIPRU firm) available when required;8(3) it ranks for repayment upon winding up, administration or similar procedure after all other debts and liabilities; and(4) it has no fixed costs, that is, there is no inescapable obligation to pay dividends or interest.
GENPRU 2.2.11GRP
Tier two capital includes forms of capital that do not meet the requirements for permanency and absence of fixed servicing costs that apply to tier one capital. Tier two capital includes, for example:(1) capital which is perpetual (that is, has no fixed term) but cumulative (that is, servicing costs cannot be waived at the issuer's option, although they may be deferred – for example, cumulative preference shares); only perpetual capital instruments may be included in upper tier
GENPRU 2.2.15GRP
Deductions should also be made, in the case of certain BIPRU firms16 for illiquid assets (see GENPRU 2.2.19 R).16
GENPRU 2.2.18RRP
In the case of a BIPRU firm the capital resources table also sets out how the capital resources requirement is deducted from capital resources in order to decide whether its capital resources equal or exceed its capital resources requirement.
GENPRU 2.2.19RRP
This table belongs to GENPRU 2.2.17 RType of firmLocation of rulesRemarksBIPRU firm16without an investment firm consolidation waiver16GENPRU 2 Annex 4 (Deducts material holdings)Applies to a BIPRU firm16not using GENPRU 2 Annex 5 or GENPRU 2 Annex 616BIPRU firm16without an investment firm consolidation waiver16GENPRU 2 Annex 5 (Deducts illiquid assets)A BIPRU firm16must give one Month's prior notice to the FCA16 before starting to use or stopping using this method1616BIPRU firm16with
GENPRU 2.2.20GRP
GENPRU 2.2.19 R sets out three different methods of calculating capital resources for BIPRU firms16. The differences between the three methods relate to whether and how material holdings and illiquid assets are deducted when calculating capital resources. The method depends on whether a firm has an investment firm consolidation waiver. If a firm does have such a waiver, it should deduct illiquid assets, own groupmaterial holdings and certain contingent liabilities. If a firm does
GENPRU 2.2.26ARRP
8A dated item of tier one capital which is included in a BIPRU firm'stier two capital resources under GENPRU 2.2.25 R is not subject to the requirement to have no fixed maturity date in GENPRU 2.2.177R (1).
GENPRU 2.2.28RRP
In the case of a BIPRU firm, the8 requirement to obtain a legal opinion in GENPRU 2.2.159R (12) does not apply to hybrid capital treated under GENPRU 2.2.25 R8 but the requirements to obtain a legal opinion in GENPRU 2.2.118 R continue to apply.88
GENPRU 2.2.30ARRP
8In relation to the tier one capital resources of a BIPRU firm, calculated at stage F of the calculation in the capital resources table (Total tier one capital after deductions):(1) no more than 50% may be accounted for by hybrid capital;(2) no more than 35% may be accounted for by hybrid capital included at stages B2 and C of the calculation in the capital resources table; and (3) no more than 15% may be accounted for by hybrid capital included at stage C of the calculation in
GENPRU 2.2.31GRP
The purpose of the requirements8 in18GENPRU 2.2.30AR (1) is to ensure that the firm'stier one capital resources includes a minimum proportion of core tier one capital which provides the highest quality capital.8 Within the 50% limit on non-core tier one capital88(1) [deleted]188(2) 8GENPRU 2.2.30AR (2) and GENPRU 2.2.30AR (3) place further sub-limits on the amounts of hybrid capital included at stages B2 and C of the calculation in the capital resources table that a BIPRU firm
GENPRU 2.2.44RRP
Tier one capital and tier two capital are the only type of capital resources that a BIPRU firm may use for the purpose of meeting:(1) the credit risk capital component;(2) [deleted] 1616(3) the counterparty risk capital component; and(4) the base capital resources requirement.
GENPRU 2.2.45RRP
GENPRU 2.2.44 R (and the capital resources gearing rules that relate to it) also applies for the purposes of any other requirement in the Handbook for which it is necessary to calculate the capital resources of a BIPRU firm, except for the purposes described in GENPRU 2.2.47 R and except as may otherwise be stated in the relevant part of the Handbook.
GENPRU 2.2.46RRP
For the purpose of GENPRU 2.2.44 R:(1) the amount of the items which may be included in a BIPRU firm'stier two capital resources must not exceed the amount calculated at stage F of the calculation in the capital resources table (Total tier one capital after deductions); and(2) the amount of the items which may be included in a BIPRU firm'slower tier two capital resources must not exceed 50% of the amount calculated at stage F of the calculation in the capital resources table.
GENPRU 2.2.47RRP
For the purposes of meeting:(1) the market risk capital requirement; and22(2) [deleted]22(3) the fixed overheads requirement ;16a BIPRU firm may only use the following parts of its capital resources:(4) tier one capital to the extent that it is not required to meet the requirements in GENPRU 2.2.44 R (GENPRU 2.2.48 R explains how to calculate how much tier one capital is required to meet the requirements in GENPRU 2.2.44 R);(5) tier two capital to the extent that it:(a) comes
GENPRU 2.2.49RRP
For the purpose of meeting the requirements in GENPRU 2.2.47R (1) to GENPRU 2.2.47R (3) and subject to GENPRU 2.2.50 R, a BIPRU firm must not include any item in either:(1) its tier two capital resources falling within GENPRU 2.2.47R (6) (excess tier two capital); or(2) its upper tier three capital resources;to the extent that the sum of (1) and (2) would exceed 250% of the amount resulting from the following calculation:(3) calculate the amount at stage F of the calculation in
GENPRU 2.2.50RRP
In relation to a BIPRU firm16 which calculates its capital resources under GENPRU 2 Annex 4 (Capital resources table for a BIPRU investment firm deducting material holdings), the figure of 200% replaces that of 250% in GENPRU 2.2.49 R.16
GENPRU 2.2.52GRP
This table belongs to GENPRU 2.2.51 GDescription of the stage of the capital resources calculationStage in the capital resources tableAmount (£)Total tier one capital after deductions 8Stage F80Total tier two capital8Stage K80DeductionsStage M(20)Total tier one capital and tier two capital after deductionsStage N140Upper tier three capital (this example assumes the firm has no lower tier three capital (trading book profits))Stage Q50Total capital resourcesStage T190
GENPRU 2.2.56GRP
This table belongs to GENPRU 2.2.55 GDescription of the stage of the capital resources calculationStage in the capital resources tableAmount (£)Total tier one capital and tier two capital after deductionsStage N140Credit and counterparty1 risk requirement16(100)Tier one capital and tier two capital available to meet market risk requirement40Tier three capitalStage Q50Total capital available to meet market risk requirement90Market risk requirement(90)Market risk requirement met
GENPRU 2.2.60RRP
A BIPRU firm may use the capital resources used to meet the base capital resources requirement to meet any other part of the capital resources requirement.
GENPRU 2.2.61HGRP
12Details of the notification to be provided by a BIPRU firm in relation to capital instruments issued by another undertaking in its group for inclusion in its capital resources or the consolidated capital resources of its UK consolidation group or non-EEA sub-group are set out in BIPRU 8.6.1A R to BIPRU 8.6.1F R. 17
GENPRU 2.2.68ARRP
8A BIPRU firm must not include a capital instrument in its tier one capital resources if:(1) the capital instrument is affected by a dividend stopper; and (2) the dividend stopper operates in a way that hinders recapitalisation.
GENPRU 2.2.69ARRP
8A BIPRU firm must not make a payment of a coupon on an item of hybrid capital if the firm has no distributable reserves.
GENPRU 2.2.69BRRP
8A BIPRU firm must cancel the payment of a coupon on an item of hybrid capital if the BIPRU firm does not meet its capital resources requirement or if the payment of that coupon would cause it to breach its capital resources requirement.
GENPRU 2.2.69CRRP
8A BIPRU firm must not pay a coupon on an item of hybrid capital in the form of core tier one capital in accordance with GENPRU 2.2.64R (4)(b) unless:(1) the firm meets its capital resources requirement; and(2) such a substituted payment preserves the firm's financial resources.
GENPRU 2.2.69DGRP
8The FCA18 considers that a BIPRU firm's financial resources are not preserved under GENPRU 2.2.69CR (2) unless, among other things, the conditions of the substituted payment are that:(1) there is no decrease in the amount of the firm'score tier one capital;(2) the deferred coupon is satisfied without delay using newly issued core tier one capital that has an aggregate fair value no more than the amount of the coupon;(3) the firm is not obliged to find new investors for the newly
GENPRU 2.2.69ERRP
8A BIPRU firm must cancel the payment of a coupon if circumstances arise whereby the payment of the coupon by newly issued instruments, in accordance with GENPRU 2.2.64R (4)(b), does not comply with the requirements of GENPRU 2.2.69C R.
GENPRU 2.2.69FGRP
(1) 8In relation to the cancellation or deferral of the payment of a coupon in accordance with GENPRU 2.2.64R (4) and GENPRU 2.2.64R (5), GENPRU 2.2.68A R, or GENPRU 2.2.69B R, the FCA18 expects that situations where a coupon may need to be cancelled or deferred will be resolved through analysis and discussion between the firm and the FCA18. If the FCA18 and the firm do not agree on the cancellation or deferral of the payment of a coupon, then the FCA18 may consider using its
GENPRU 2.2.70RRP
A firm may not include a capital instrument in its tier one capital resources, unless its contractual terms are such that:(1) (if it is redeemable other than in circumstances set out in GENPRU 2.2.64R (3)(a) (redemption on a winding up)) it is redeemable only at the option of the firm or, in the case of a BIPRU firm, on the date of maturity;88(2) the firm cannot exercise that redemption right:(a) before the fifth anniversary of its date of issue; and18(b) unless it has given notice
GENPRU 2.2.70AGRP
8In the case of a BIPRU firm, an incentive to redeem is a feature of a capital instrument that would lead a reasonable market participant to have an expectation that the firm will redeem the instrument. The FCA18 considers that interest rate step-ups and principal stock settlements, in conjunction with a call option, are incentives to redeem. Only instruments with moderate incentives to redeem are permitted as tier one capital, in accordance with the limited conversion ratio
GENPRU 2.2.74RRP
A firm must not redeem any tier one instrument that it has included in its tier one capital resources unless it has notified the FCA18 of its intention at least one month before it becomes committed to do so. When giving notice, the firm must provide details of its position after such redemption in order to show how it will:77(1) meet its capital resources requirement;78(2) 7have sufficient financial resources to meet the overall financial adequacy rule; and8(3) 8in the case
GENPRU 2.2.74BRRP
8If a BIPRU firm does not comply with its capital resources requirement or if the redemption of any dated tier one instrument would cause it to breach its capital resources requirement, it must suspend the redemption of its dated tier one instruments.
GENPRU 2.2.79ARRP
8A BIPRU firm must not purchase a tier one instrument that it has included in its tier one capital resources unless:(1) the firm initiates the purchase;(2) 10[deleted]10(3) the firm has given notice to the FCA18 in accordance with GENPRU 2.2.79G R; and10(4) 10(in the case of hybrid capital) it is on or after the fifth anniversary of the date of issue of the instrument.
GENPRU 2.2.79BGRP
8In exceptional circumstances a BIPRU firm may apply for a waiver of GENPRU 2.2.79AR (4) under section 138A (Modification or waiver of rules) of the Act.10
GENPRU 2.2.79GRRP
8A BIPRU firm must not purchase a tier one instrument in accordance with GENPRU 2.2.79A R unless it has notified the FCA18 of its intention at least one month before it becomes committed to doing so. When giving notice, the firm must provide details of its position after the purchase in order to show how, over an appropriate timescale, adequately stressed, and without planned recourse to the capital markets, it will:(1) meet its capital resources requirement; and(2) have sufficient
GENPRU 2.2.79IRRP
10A BIPRU firm must not announce to the holders of a tier one instrument its intention to purchase that instrument unless it has notified that intention to the FCA18 in accordance with GENPRU 2.2.79G R and it has not, during the period of one month from the date of giving notice, received an objection from the FCA18.
GENPRU 2.2.79JRRP
10If a BIPRU firm announces the purchase of any tier one instrument, the firm must no longer include that instrument in its tier one capital resources.
GENPRU 2.2.79KRRP
10If a BIPRU firm does not comply with its capital resources requirement, or if the purchase of any tier one instrument would cause it to breach its capital resources requirement, it must suspend the purchase of tier one instruments.
GENPRU 2.2.83RRP
Permanent share capital means an item of capital which (in addition to satisfying GENPRU 2.2.64 R) meets the following conditions:(1) it is:(a) an ordinary share; or(b) a members' contribution; or(c) part of the initial fund of a mutual; or8(d) [deleted]15815(2) any coupon on it is not cumulative, the firm is under no obligation to pay a coupon in any circumstances and the firm has the right to choose the amount of any coupon that it pays;10(3) the terms upon which it is issued
GENPRU 2.2.83ARRP
10The conditions that a BIPRU firm's permanent share capital must comply with under GENPRU 2.2.83AR (4) or that a BIPRU firm'seligible partnership capital or eligible LLP members' capital must comply with under GENPRU 2.2.95 R are as follows:(1) it is undated;(2) the terms upon which it is issued do not give the holder a preferential right to the payment of a coupon;(3) the terms upon which it is issued do not indicate the amount of any coupon that may be payable nor impose an
GENPRU 2.2.83BRRP
10A BIPRU firm must not include in stage A of the capital resources table different classes of the same share type (for example "A ordinary shares" and "B ordinary shares") that meet the conditions in GENPRU 2.2.83 R and GENPRU 2.2.83A R but have differences in voting rights, unless it has notified the FCA18 of its intention at least one month before the shares are issued or (in the case of existing issued shares) the differences in voting rights take effect.
GENPRU 2.2.83CRRP
10A BIPRU firm must not pay a coupon on a tier one instrument included in stage A of the capital resources table if it has no distributable reserves.
GENPRU 2.2.83DGRP
10A BIPRU firm may disclose its dividend policy, provided that the policy only reflects the current intention of the firm and does not undermine the firm's right to choose the amount of any coupon that it pays.
GENPRU 2.2.85RRP
(1) Negative amounts, including any interim net losses (but in the case of a BIPRU firm16, only material interim net losses), must be deducted from profit and loss account and other reserves.16(2) For these purposes material interim net losses mean unaudited interim losses arising from a firm'strading book and non-trading book business which exceed 10% of the sum of its capital resources calculated at stage A (Core tier one capital)8 in the capital resources table.8(3) If interim
GENPRU 2.2.86RRP
(1) This rule applies to trading book valuation adjustments or reserves referred to in GENPRU 1.3.29 R to 14GENPRU 1.3.35A G14 (Valuation adjustments and reserves). It applies to a BIPRU firm.(2) When valuation adjustments or reserves give rise to losses of the current financial year, a firm must treat them in accordance with GENPRU 2.2.85 R.(3) Valuation adjustments or reserves which exceed those made under the accounting framework to which a firm is subject must be treated in
GENPRU 2.2.90RRP
In the case of a BIPRU firm which is the originator of a securitisation, net gains arising from the capitalisation of future income from the securitised assets and providing credit enhancement to positions in the securitisation must be excluded from profit and loss account and other reserves.
GENPRU 2.2.92GRP
A revaluation reserve is not included as part of a BIPRU firm's profit and loss account and other reserves. It is dealt with separately and forms part of a BIPRU firm'supper tier two capital.
GENPRU 2.2.93RRP
Eligible partnership capital means a partners' account:(1) into which capital contributed by the partners is paid; and(2) from which under the terms of the partnership agreement an amount representing capital may be withdrawn by a partner only if:(a) he ceases to be a partner and an equal amount is transferred to another such account by his former partners or any person replacing him as their partner;2(b) the partnership is wound up or2 otherwise dissolved; or22(c) the BIPRU firm
GENPRU 2.2.94RRP
Eligible LLP members' capital means a members' account:(1) into which capital contributed by the members is paid; and(2) from which under the terms of the limited liability partnership agreement an amount representing capital may be withdrawn by a member only if:(a) he ceases to be a member and an equal amount is transferred to another such account by his former fellow members or any person replacing him as a member; 2(b) the limited liability partnership is wound up or2 otherwise
GENPRU 2.2.95RRP
A BIPRU firm that is a partnership or a limited liability partnership may not include eligible partnership capital or eligible LLP members' capital in its tier one capital resources unless (in addition to GENPRU 2.2.62 R (General conditions relating to tier one capital)) it complies with GENPRU 2.2.83R (2) (10Coupons should not be cumulative or mandatory) and GENPRU 2.2.83A R to GENPRU 2.2.83C R (General conditions for eligibility of capital instruments as core tier one capital
GENPRU 2.2.97RRP
The items permanent share capital and share premium account (which form part of core tier one capital) do not apply to a BIPRU firm that is a partnership or a limited liability partnership.8
GENPRU 2.2.98RRP
Without prejudice to GENPRU 2.2.62 R (Tier one capital: General), the item other reserves (which forms part of the item profit and loss and other reserves) applies to a BIPRU firm that is a partnership or a limited liability partnership to the extent the reserves correspond to reserves that are eligible for inclusion as other reserves in the case of a BIPRU firm that is incorporated under the Companies Act 20066.6
GENPRU 2.2.99GRP
A BIPRU firm that is a partnership or a limited liability partnership should include profit and loss (taking into account interim losses or material interim net losses) in its core tier one capital.
GENPRU 2.2.100RRP
A BIPRU firm which is a partnership or limited liability partnership must deduct at stage E of the calculation in the capital resources table (Deductions from tier one capital) the amount by which the aggregate of the amounts withdrawn by its partners or members exceeds the profits of that firm. Amounts of eligible partnership capital or eligible LLP members' capital repaid in accordance with GENPRU 2.2.93 R or GENPRU 2.2.94 R are not included in this calculation.
8A BIPRU firm must not include a capital instrument at stage B1 of the calculation in the capital resources table unless (in addition to satisfying all the other requirements in relation to tier one capital and hybrid capital) its contractual terms are such that:(1) it cannot be redeemed in cash but can only be converted into core tier one capital;(2) it must be converted into core tier one capital by the firm during emergency situations; (3) the emergency situations referred
8A BIPRU firm may include a capital instrument at stage B2 of the calculation in the capital resources table if (while satisfying all the other requirements in relation to tier one capital and hybrid capital)it cannot be included at stage B1 of that calculation as it does not satisfy the requirements of GENPRU 2.2.115A R.
8A BIPRU firm may include a capital instrument at stage C of the calculation in the capital resources table, and must not include it in stage B1 or B2 of that calculation, if (in addition to satisfying all the other requirements in relation to tier one capital and hybrid capital) it either:(1) is dated; or(2) provides an incentive for the firm to redeem it, as assessed at the date of its issue.
8A BIPRU firm must not include a capital instrument that is not a share at stage B1, B2 or C of the calculation in the capital resources table unless (in addition to satisfying all the other requirements in relation to tier one capital and hybrid capital) the firm's obligations under the instrument either:(1) do not constitute a liability (actual, contingent or prospective) under section 123(2) of the Insolvency Act 1986; or(2) do constitute such a liability but the terms of the
8A BIPRU firm must not include a capital instrument at stage B1, B2 or C of the calculation in the capital resources table unless (in addition to satisfying all the other requirements in relation to tier one capital and hybrid capital) its contractual terms provide for a mechanism within the instrument which:(1) is clearly defined and legally certain;(2) is disclosed and transparent to the market;(3) makes the recapitalisation of the firm more likely by adequately reducing the
GENPRU 2.2.118RRP
8(1) [deleted]188(2) A BIPRU firm may not include a capital instrument at stage B1, B2 or C of the calculation in the capital resources table unless it has obtained a properly reasoned independent legal opinion from an appropriately qualified individual confirming that the criteria in GENPRU 2.2.62 R (Tier one capital: General), GENPRU 2.2.64R (1) to GENPRU 2.2.64R (9) (General conditions for eligibility as tier one capital) and GENPRU 2.2.80 R to GENPRU 2.2.81 R (Loss absorption)
GENPRU 2.2.123RRP
GENPRU 2.2.123 R to GENPRU 2.2.137 R apply to a BIPRU firm.
GENPRU 2.2.124RRP
(1) GENPRU 2.2.123 R - GENPRU 2.2.137 R apply to capital of a firm if:(a) either or both of the conditions in (2) are satisfied; and(b) any of the SPVs referred to in (2) is a subsidiary undertaking of the firm.(2) The conditions referred to in (1) are:(a) that capital is issued to an SPV; or(b) the subscription for the capital issued by the firm is funded directly or indirectly by an SPV.(3) A BIPRU firm may not include capital coming within this rule in its capital resources
GENPRU 2.2.125RRP
A BIPRU firm may only count capital to which GENPRU 2.2.124 R applies at stage C of the calculation in the capital resources table.88
GENPRU 2.2.126RRP
For the purpose of GENPRU 2.2, an SPV is, in relation to a BIPRU firm, any undertaking whose main activity is to raise funds for that firm or for a group to which that BIPRU firm belongs.
GENPRU 2.2.127RRP
The SPV referred to in GENPRU 2.2.124R (2)(a) must satisfy the following conditions:(1) it is controlled by the firm and may not operate independently of the firm;(2) the rights of investors in the SPV who do not belong to the group of the BIPRU firm in question are not such as to affect the ability of the firm to control the SPV;8(3) all or virtually all of its exposures (calculated by reference to the amount) consist of exposures to the firm or to that firm'sgroup; and8(4) 8it
GENPRU 2.2.128GRP
An SPV could take the form of a limited partnership. In such an arrangement, holders of a capital instrument issued by the SPV which do not belong to the group of the BIPRU firm in question should have no right to participate in the management of the partnership, whether under the partnership's constitutional documents or the transaction documents. In general, this means that they should be treated as limited partners. It is expected that the general partner, having control of
GENPRU 2.2.147RRP
(1) A firm may not include in its tier one capital resources a tier one instrument that is or may be subject to a step-up that does not meet the definition of moderate in the press release of the Basle Committee on Banking Supervision of 27th October 1998 called "Instruments eligible for inclusion in Tier 1 capital".(2) For the purpose of (1) the words in that press release "than, at national supervisory discretion, either" are replaced by "than the higher of the following two
GENPRU 2.2.179GRP
(1) The purpose of GENPRU 2.2.177R (2) is to ensure that a firm which issues an item of capital with a coupon retains flexibility over the payments of such coupon and can preserve cash in times of financial stress. However, a firm may include, as part of the capital instrument terms, a right to make payments of a coupon mandatory if an item of capital becomes ineligible to form part of its capital resources (for example, through a change in the relevant rules) and the firm has
GENPRU 2.2.185RRP
(1) This rule applies to a BIPRU firm.(2) A BIPRU firm must, in relation to equities held in the available-for-sale financial assets category:(a) deduct any net losses at stage E of the calculation in the capital resources table (Deductions from tier one capital); and(b) include any net gains (after deduction of deferred tax) in revaluation reserves at stage G of the calculation in the capital resources table (Upper tier two capital).(3) A BIPRU firm must include any net gains,
GENPRU 2.2.186GRP
Subject to GENPRU 2.2.185 R, a BIPRU firm should value its revaluation reserves in accordance with the rules in GENPRU 1.3 (Valuation).
GENPRU 2.2.187RRP
A BIPRU firm which adopts the standardised approach to credit risk may include general/collective provisions in its tier two capital resources only if:(1) they are freely available to the firm;(2) their existence is disclosed in internal accounting records; and(3) their amount is determined by the management of the firm, verified by independent auditors and notified to the FCA18.
GENPRU 2.2.190RRP
A BIPRU firm calculating risk weighted exposure amounts under the IRB approach may include in its upper tier two capital resources positive amounts resulting from the calculation in BIPRU 4.3.8 R (Treatment of expected loss amounts), up to 0.6% of the risk weighted exposure amounts calculated under that approach.
GENPRU 2.2.191RRP
A BIPRU firm calculating risk weighted exposure amounts under the IRB approach may not include in its capital resources value adjustments and provisions included in the calculation in BIPRU 4.3.8 R (Treatment of expected loss amounts under the IRB approach for trading bookexposures) or value adjustments and provisions for exposures that would otherwise have been eligible for inclusion in general/collective provisions other than in accordance with GENPRU 2.2.190 R.
GENPRU 2.2.193RRP
If a BIPRU firm calculates risk weighted exposure amounts under the IRB approach for the purposes of BIPRU 14 (Capital requirements for settlement and counterparty risk) it must not include valuation adjustments referred to in BIPRU 14.2.18 R (1) (Treatment of expected loss amounts) in its capital resources except in accordance with that rule.
GENPRU 2.2.208RRP
GENPRU 2.2.208 R to GENPRU 2.2.216 G only apply to a BIPRU firm.
GENPRU 2.2.209RRP
(1) Subject to (2) and (3), a material holding is:11(a) a BIPRU firm's holdings of shares and any other interest in the capital of an individual credit institution or financial institution (held in the non-trading book or the trading book or both) exceeding 10% of the share capital of the issuer, and, where this is the case, any holdings of subordinated debt of the same issuer are also included as a material holding; the full amount of the holding is a material holding; or11(b)
GENPRU 2.2.212RRP
A material insurance holding means the holdings of a BIPRU firm of items of the type set out in GENPRU 2.2.213 R in any:(1) insurance undertaking; or(2) insurance holding company;that fulfils one of the following conditions:(3) it is a subsidiary undertaking of that firm; or(4) that firm holds a participation in it.
GENPRU 2.2.217RRP
GENPRU 2.2.217 R to GENPRU 2.2.220 R apply to a BIPRU firm.
GENPRU 2.2.218RRP
A BIPRU firm must deduct at stage M of the calculation in the capital resources table (Deductions from the totals of tier one and two) any reciprocal cross-holdings. However a BIPRU firm must not deduct such holdings to the extent that they fall to be deducted at Part 1 of stage M of the calculation in the capital resources table (Deductions for material holdings, qualifying holdings and certain other items).
GENPRU 2.2.219RRP
A reciprocal cross-holding means a holding of the BIPRU firm of shares, any other interest in the capital, and subordinated debt, whether in the trading or non-trading book, in:(1) a credit institution; or(2) a financial institution;that satisfies the following conditions:(3) the holding is the subject of an agreement or arrangement between the BIPRU firm and either the issuer of the instrument in question or a member of a group to which the issuer belongs;(4) under the terms
GENPRU 2.2.220RRP
For the purpose of GENPRU 2.2.219 R, a relevant rule means a rule in GENPRU, BIPRU or INSPRU or any other capital adequacy or solvency requirements of the FCA18 or any other regulator, territory or country.
GENPRU 2.2.236RRP
A BIPRU firm calculating risk weighted exposure amounts under the IRB approach must deduct:(1) any negative amounts arising from the calculation in BIPRU 4.3.8 R (Treatment of expected loss amounts); and(2) any expected loss amounts2 calculated in accordance with BIPRU 4.7.12 R (Expected loss amounts under the simple risk weight approach to calculating risk weighted exposure amounts for exposures belonging to the equity exposureIRB exposure class) or BIPRU 4.7.17 R (Expected loss
GENPRU 2.2.237RRP
A BIPRU firm calculating risk weighted exposure amounts under the IRB approach or the standardised approach to credit risk must deduct from its capital resources the following:1313(1) the exposure amount of securitisation positions which receive a risk weight of 1250% under BIPRU 9 (Securitisation), unless the firm includes the securitisation positions in its calculation of risk weighted exposure amounts (see BIPRU 9.10 (Reduction in risk-weighted exposure amounts)); and13(2)
GENPRU 2.2.238RRP
GENPRU 2.2.238 R to GENPRU 2.2.241 R apply to a BIPRU firm and relate to the deductions in respect of:(1) material holdings;(2) expected loss amounts and other negative amounts referred to in GENPRU 2.2.236 R; and(3) securitisation positions referred to in GENPRU 2.2.237 R.
GENPRU 2.2.239RRP
(1) The treatment in the capital resources table of the deductions in GENPRU 2.2.238 R only has effect for the purpose of the capital resources gearing rules.(2) In other cases (3) and (4) apply.(3) A BIPRU firm making the deductions described in GENPRU 2.2.238 R must deduct 50% of the total amount of those deductions at stage E (Deductions from tier one capital) and 50% at stage J (Deductions from tier two capital) of the calculation in the capital resources table after the application
GENPRU 2.2.240GRP
The alternative calculation in GENPRU 2.2.239R (3) to (4) is only relevant to BIPRU 11 (Pillar 3 disclosures) and certain reporting requirements under SUP. However the deduction of material holdings at Part 2 of stage E of the capital resources table in the case of a BIPRU firm16 with an investment firm consolidation waiver has effect for all purposes.16
GENPRU 2.2.241RRP
GENPRU 2.2.241 R to GENPRU 2.2.245 R only apply to a BIPRU firm.
GENPRU 2.2.242RRP
A BIPRU firm may include subordinated debt in its upper tier three capital resources only if:(1) it has an original maturity of at least two years or is subject to at least two years' notice of repayment; and(2) payment of interest or principal is permitted only if, after that payment, the firm'scapital resources would be not less than its capital resources requirement.
GENPRU 2.2.243RRP
A BIPRU firm which includes subordinated debt in its tier three capital resources must notify the FCA18 one month in advance of all payments of either interest or principal made when the firm'scapital resources are less than 120% of its capital resources requirement.
GENPRU 2.2.244RRP
The rules in the table in GENPRU 2.2.245 R apply to short term subordinated debt that a BIPRU firm includes in its tier three capital resources in the same way that they apply to a firm'stier two capital resources with the adjustments in that table.
GENPRU 2.2.246RRP
GENPRU 2.2.246 R to GENPRU 2.2.249 R only apply to a BIPRU firm.
GENPRU 2.2.247RRP
A BIPRU firm's net interim trading book profits mean its net trading book profits adjusted as follows:(1) they are net of any foreseeable charges or dividends and less net losses on its other business; and(2) a firm must not take into account items that have already been included in the calculation of capital resources as part of the calculation of the following items:(a) interim net profits (see stage (A) of the capital resources table); or(b) interim net losses or material interim
GENPRU 2.2.259RRP
GENPRU 2.2.259 R to GENPRU 2.2.262 G only apply to a BIPRU firm16.16
GENPRU 2.2.265RRP
The standard market risk PRR rules apply for establishing what is a net position and the amount and value of that position for the purposes of GENPRU 2.2.264 R, ignoring rules which would otherwise exclude such positions from BIPRU 7.2 (Interest rate PRR) or BIPRU 7.3 (Equity PRR and basic interest rate PRR for equity derivatives) on the basis that they are to be deducted from a bank or building society'scapital resources, or for any other reason.
GENPRU 2.2.276RRP
A BIPRU firm may not include a guarantee from a state or public authority in its capital resources.
GENPRU 2.1.1RRP
1This section applies to a BIPRU firm.14
GENPRU 2.1.6GRP
Principle 4 requires a firm to maintain adequate financial resources. GENPRU 2 sets out provisions that deal specifically with the adequacy of that part of a firm's financial resources that consists of capital resources. The adequacy of a firm'scapital resources needs to be assessed both by that firm and the appropriate regulator. Through its rules, the FCA14 sets minimum capital resources requirements for firms. It also reviews a firm's own assessment of its capital needs,
GENPRU 2.1.7GRP
This section sets capital resources requirements for a firm. GENPRU 2.2 (Capital resources) sets out how, for the purpose of meeting capital resources requirements, the amounts or values of capital, assets and liabilities are to be determined. More detailed rules relating to capital, assets and liabilities are set out in GENPRU 1.3 (Valuation)14 and, for a BIPRU firm, BIPRU.
GENPRU 2.1.9RRP
A firm must at all times monitor whether it is complying with14 the main BIPRU firm Pillar 1 rules and be able to demonstrate that it knows at all times whether it is complying with those rules.
GENPRU 2.1.10GRP
For the purposes of GENPRU 2.1.9 R, a firm should have systems in place to enable it to be certain whether it has adequate capital resources to comply with14 the main BIPRU firm Pillar 1 rules14 at all times. This does not necessarily mean that a firm needs to measure the precise amount of its capital resources and its CRR on a daily basis. A firm should, however, be able to demonstrate the adequacy of its capital resources at any particular time if asked to do so by the FCA1
GENPRU 2.1.11RRP
A firm must notify the FCA14 immediately of any breach, or expected breach, of14 the main BIPRU firm Pillar 1 rules14.
GENPRU 2.1.40RRP
A BIPRU firm must maintain at all times capital resources equal to or in excess of the amount specified in the table in GENPRU 2.1.45 R (Calculation of the variable capital requirement for a BIPRU firm).
GENPRU 2.1.41RRP
A BIPRU firm must maintain at all times capital resources equal to or in excess of the base capital resources requirement (see the table in GENPRU 2.1.48 R).
GENPRU 2.1.42RRP
At the time that it first becomes a BIPRU firm12, a firm must hold initial capital of not less than the base capital resources requirement applicable to that firm.12
GENPRU 2.1.43GRP
The purpose of the base capital resources requirement for a BIPRU firm is to act as a minimum capital requirement or floor. It has been written as a separate requirement as there are restrictions in GENPRU 2.2 (Capital resources) on the types of capital that a BIPRU firm may use to meet the base capital resources requirement which do not apply to some other parts of the capital requirement calculation. In order to preserve the base capital resources requirement's role as a floor
GENPRU 2.1.44GRP
The base capital resources requirement and the variable capital requirement in GENPRU 2.1.40 R are together called the capital resources requirement (CRR) in the case of a BIPRU firm.
GENPRU 2.1.45RRP
This table belongs to GENPRU 2.1.40 RFirm categoryCapital requirementBIPRU firm12(including collective portfolio management investment firm9)129the higher of (1) and (2):(1)the sum of:(a)the credit risk capital requirement; and(b)the market risk capital requirement; and(2)the fixed overheads requirement.
GENPRU 2.1.47RRP
The amount of a BIPRU firm'sbase capital resources requirement is set out in the table in GENPRU 2.1.48 R.
GENPRU 2.1.48RRP
This table belongs to GENPRU 2.1.47 RFirm categoryAmount: Currency equivalent of12BIPRU firm (but not a collective portfolio management investment firm)1212€50,00012
GENPRU 2.1.49GRP
The Capital Adequacy Directive sets out various categories of investment firms subject to differing levels of initial capital. For the purpose of the third paragraph of article 95(2) of the EU CRR, a BIPRU firm falls into the category in article 5(3) of the Capital Adequacy Directive. In summary, a BIPRU firm: 1212(1) does not provide the ancillary service of safekeeping and administration of financial instruments for the account of clients, including custodianship and related
GENPRU 2.1.51RRP
A BIPRU firm must calculate its credit risk capital requirement as the sum of:(1) the credit risk capital component; and15(2) the counterparty risk capital component.15(3) [deleted]15
GENPRU 2.1.52RRP
(1) A BIPRU firm must calculate its market risk capital requirement as the sum of:(a) the interest rate PRR (including the basic interest rate PRR for equity derivatives set out in BIPRU 7.3 (Equity PRR and basic interest rate PRR for equity derivatives));(b) the equity PRR;(c) the commodity PRR;(d) the foreign currency PRR;(e) the option PRR; and(f) the collective investment undertaking PRR.(2) Any amount calculated under BIPRU 7.1.9 R - BIPRU 7.1.13 R (Instruments for which
GENPRU 2.1.53RRP
A 12BIPRU firm must12 calculate a fixed overheads requirement, an amount that 12is equal to one quarter of the firm's relevant fixed expenditure calculated in accordance with GENPRU 2.1.54 R.12
GENPRU 2.1.54RRP
For the purpose of GENPRU 2.1.53 R, and subject to GENPRU 2.1.55 R to GENPRU 2.1.57 R,a BIPRU firm's12 relevant fixed expenditure is the amount described as total expenditure in its most recent audited annual report and accounts, less the following items (if they are included within such expenditure):12(1) staff bonuses, except to the extent that they are guaranteed;(2) employees' and directors' shares in profits, except to the extent that they are guaranteed;(3) other appropriations
BIPRU 12.2.1RRP
(1) A firm must at all times maintain liquidity resources which are adequate, both as to amount and quality, to ensure that there is no significant risk that its liabilities cannot be met as they fall due.(2) For the purpose of (1):(a) a firm may not include liquidity resources that can be made available by other members of its group;(b) an incoming EEA firm or a third country BIPRU firm may not, in relation to its UK branch, include liquidity resources other than those which
BIPRU 12.2.4GRP
The effect of BIPRU 12.2.1R (2)(b) and BIPRU 12.2.3 R is to require an incoming EEA firm or a third country BIPRU firm to maintain a local operational liquidity reserve in relation to the activities of its UK branch. BIPRU 12.9 contains further guidance on this point.
BIPRU 12.2.6GRP
The overall liquidity adequacy rule is expressed to apply to each firm on a solo basis. Each firm must be able to satisfy that rule relying solely on its own liquidity resources. Where the firm is an incoming EEA firm or a third country BIPRU firm, compliance with the overall liquidity adequacy rule with respect to the UK branch must be achieved relying solely on liquidity resources that satisfy the conditions in BIPRU 12.2.3R.
BIPRU 12.2.8RRP
For the purposes of the overall liquidity adequacy rule, an ILAS BIPRU firm must also ensure that:(1) its liquidity resources contain an adequate buffer of high quality, unencumbered assets; and(2) it maintains a prudent funding profile.
BIPRU 12.2.9GRP
The purpose of BIPRU 12.2.8R is to ensure that an ILAS BIPRU firm has a buffer of liquid assets which are available to meet those liabilities which fall due in periods of stress experienced by that firm. Those periods of stress may be both market-wide and idiosyncratic in nature. The appropriate regulator acknowledges that in periods of stress a firm's liquid assets buffer may be eroded.
BIPRU 12.2.11RRP
In complying with BIPRU 12.2.8R, a simplified ILAS BIPRU firm must ensure that its liquid assets buffer is at least equal to the amount of liquidity resources required by the simplified buffer requirement.
BIPRU 12.2.12GRP
Theappropriate regulator is likely to regard a simplified ILAS BIPRU firm whose liquid assets buffer accords with the simplified buffer requirement as having an adequate buffer of assets and a prudent funding profile for the purpose of BIPRU 12.2.8R. Further guidance on this matter is provided in BIPRU 12.6.5G.
BIPRU 12.2.13GRP
BIPRU 12.7 contains more detailed rules and guidance about the type of assets that an ILAS BIPRU firm is permitted to hold in order to satisfy BIPRU 12.2.8R.
BIPRU 12.2.14GRP
The adequacy of an ILAS BIPRU firm's liquidity resources needs to be assessed both by that firm and by the appropriate regulator. This process involves:(1) in the case of a standard ILAS BIPRU firm, an Individual Liquidity Adequacy Assessment (ILAA) which such a firm is obliged to carry out in accordance with BIPRU 12.5;(2) in the case of a simplified ILAS BIPRU firm, an Individual Liquidity Systems Assessment(ILSA) which such a firm is obliged to carry out in accordance with
BIPRU 12.2.15GRP
BIPRU 12.5 sets out the ILAS framework. That section describes some of the stress tests that a standard ILAS BIPRU firm must carry out in conducting its ILAA and identifies a number of sources of liquidity risk in relation to which a firm is required to assess the impact of those stresses. For a standard ILAS BIPRU firm, the requirements in BIPRU 12.5 are in addition to the stress testing requirements in BIPRU 12.4. The rules in BIPRU 12.5 require a standard ILAS BIPRU firm
BIPRU 12.2.18GRP
After completing a review of the ILAA as part of the SLRP, the appropriate regulator will give a standard ILAS BIPRU firmindividual liquidity guidance, advising it of the amount and quality of liquidity resources which the appropriate regulator considers are appropriate having regard to the liquidity risk profile of the firm. In giving individual liquidity guidance, the appropriate regulator will also advise the firm of what it considers to be a prudent funding profile for the
BIPRU 12.2.19GRP
BIPRU 12.5 sets out in greater detail the appropriate regulator'sILAS regime. BIPRU 12.9 sets out in greater detail the appropriate regulator's process for issuing an ILAS BIPRU firm with individual liquidity guidance and its approach to monitoring a firm's adherence to that guidance or, as the case may be, to the simplified buffer requirement.
GENPRU 1.3.1RRP
(1) [deleted]141(2) This section of the Handbook applies to a BIPRU firm.(3) [deleted]14
GENPRU 1.3.3GRP
(1) In the case of a BIPRU firm, this section implements Articles 64(4) and 64(5)9 of the Banking Consolidation Directive (Own funds) and Article 33 and Part B of Annex VII of the Capital Adequacy Directive.129(2) [deleted]1313
GENPRU 1.3.5GRP
Except where a rule in GENPRU or BIPRU makes a14 different provision, GENPRU 1.3.4 R applies whenever a rule in GENPRU or BIPRU14 refers to the value or amount of an asset, liability, exposure, equity or income statement item, including:(1) whether, and when, to recognise or de-recognise an asset or liability;(2) the amount at which to value an asset, liability, exposure, equity or income statement item; and(3) which description to place on an asset, liability, exposure, equity
GENPRU 1.3.6GRP
In particular, unless an exception applies, GENPRU 1.3.4 R should be applied for the purposes of GENPRU or BIPRU14 to determine how to account for:(1) netting of amounts due to or from the firm;(2) the securitisation of assets and liabilities (see also GENPRU 1.3.7 G);(3) leased tangible assets;(4) assets transferred or received under a sale and repurchase3 or stock lending transaction; and(5) assets transferred or received by way of initial or variation margin under a derivative
GENPRU 1.3.10RRP
An election made under GENPRU 1.3.9R (2) must be applied consistently for the purposes of GENPRU or BIPRU14 in respect of any one financial year.
GENPRU 1.3.13RRP
(1) Except to the extent that GENPRU or BIPRU14 provide for another method of valuation, GENPRU 1.3.14 R to GENPRU 1.3.34 R (Marking to market, Marking to model, Independent price verification or Valuation adjustments14) apply:99(a) for the purposes set out in GENPRU 1.3.41 R;(b) for the purposes set out in GENPRU 1.3.39 R; and(c) to any balance sheet position measured at market value or fair value.(2) A firm must establish and maintain systems and controls sufficient to provide
GENPRU 1.3.14RRP
Wherever possible, a firm must use mark to market in order to measure the value of the investments and positions to which this rule applies under GENPRU 1.3.13 R and GENPRU 1.3.38 R to GENPRU 1.3.41 R. Marking to market is valuation (on at least a daily basis in the case of the trading book positions of a BIPRU firm) at readily available close out prices from independent sources.
GENPRU 1.3.17RRP
Where marking to market is not possible, a firm must (in the case of a BIPRU firm, conservatively)9use mark to model in order to measure the value of the investments and positions to which this rule applies under GENPRU 1.3.13 R and GENPRU 1.3.38 R to GENPRU 1.3.41 R. Marking to model is any valuation which has to be benchmarked, extrapolated or otherwise calculated from a market input. GENPRU 1.3.18 R to GENPRU 1.3.25 R apply when marking to model.
GENPRU 1.3.18RRP
When the model used is developed by the firm, that model must be:(1) based on appropriate assumptions which have been assessed and challenged by suitably qualified parties independent of the development process;(2) independently tested, including validation of the mathematics, assumptions, and software implementation; and(3) (in the case of a BIPRU firm) developed or approved independently of the front office.
GENPRU 1.3.28RRP
In the case of the trading book positions of a BIPRU firm, while daily marking to market may be performed by dealers, verification of market prices and model inputs must be performed by a unit independent of the dealing room, at least monthly (or, depending on the nature of the market/trading activity, more frequently).
GENPRU 1.3.33RRP
(1) This paragraph sets out the requirements referred to in GENPRU 1.3.30 R and GENPRU 1.3.32 R.(2) A firm must consider the following adjustments14: unearned credit spreads, close-out costs, operational risks, early termination, investing and funding costs, future administrative costs and, where appropriate, model risk.9(3) 9(a) In the case of a BIPRU firm, a firm must establish and maintain procedures for calculating adjustments to the current valuation of less liquid positions.
GENPRU 1.3.36RRP
Adjustments to accounting values(1) For the purposes of GENPRU and BIPRU, the adjustments in (2) and (3) apply to values calculated pursuant to GENPRU 1.3.4 R in addition to those required by GENPRU 1.3.9 R to GENPRU 1.3.10 R.(2) A BIPRU firm must not recognise either:(a) the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost; or(b) any unrealised gains or losses on debt instruments held, or formerly held,8 in
SUP 16.12.9RRP
2The applicable data items referred to in SUP 16.12.4 R are set out according to type of firm in the table below.11The applicable reporting frequencies for submission of data items and periods referred to in SUP 16.12.4 R are set out in the table below and are calculated from a firm'saccounting reference date, unless indicated otherwise.The applicable due dates for submission referred to in SUP 16.12.4 R are set out in the table below. The due dates are the last day of the periods
SUP 16.12.11RRP
The applicable data items referred to in SUP 16.12.4 R are set out according to firm type in the table below:Description of data item45Firms' prudential category and applicable data items(note 1)IFPRU investment firms and BIPRU firmsFirmsother thanBIPRU firms or IFPRU investment firmsIFPRUBIPRUIPRU(INV)Chapter 3IPRU(INV)Chapter 5IPRU(INV)Chapter 9IPRU(INV)Chapter 1338Solvency statementNo standard format (note 11)No standard format (note 20)No standard format (note 11)38Balance
SUP 16.12.11AGRP
The column in the table in SUP16.12.11R that deals with IFPRU firms covers80 some liquidity items that only have to be reported by an ILAS BIPRU firm (please see notes 28 and 33).80134545454545454545
SUP 16.12.12RRP
The applicable reporting frequencies for data items referred to in SUP 16.12.4 R2 are set out in the table below according to firm type. Reporting frequencies are calculated from a firm'saccounting reference date, unless indicated otherwise.45Data ItemIFPRU 730K firmIFPRU 125K firm and collective portfolio management investment firmIFPRU 50K firmBIPRU firmUK consolidation group or defined liquidity groupFirm other than BIPRU firms or IFPRU investment firmsCOREP/FINREPRefer to
SUP 16.12.15RRP
The applicable data items referred to in SUP 16.12.4 R are set out76 according to firm type76 in the table below: 48Description of data itemFirms' prudential category and applicable data items (note 1)IFPRU investment firms and BIPRU firmsFirms other than BIPRU firms or IFPRU investment firmsIFPRUBIPRUIPRU(INV) Chapter 3IPRU(INV) Chapter 5IPRU(INV) Chapter 9IPRU(INV) Chapter 11 (collective portfolio management firms only)IPRU(INV) Chapter 1248IPRU(INV) Chapter 1338Solvency statement(Note
SUP 16.12.15AGRP
The column in the table in SUP 16.12.15R that deals with IFPRU firms covers80some liquidity items that only have to be reported by an ILAS BIPRU firm (please80 see notes 25 and 30).134545454545454545
SUP 16.12.16RRP
The applicable reporting frequencies for data items referred to in SUP 16.12.15 R2 are set out in the table below according to firm type. Reporting frequencies are calculated from a firm'saccounting reference date, unless indicated otherwise.45Data itemFirms' prudential categoryIFPRU 730K firmIFPRU 125K firm and collective portfolio management investment firmIFPRU 50K firmBIPRU firmUK consolidation group or defined liquidity groupFirmother than BIPRU firms or IFPRU investment
SUP 16.12.22ARRP
2The applicable data items referred to in SUP 16.12.4 R are set out according to type of firm in the table below:45Description ofData itemFirms' prudential category and applicable data item (note 1)IFPRUBIPRU firmExempt CAD firmssubject toIPRU(INV)Chapter 13Firms(other thanexempt CAD firms) subject toIPRU(INV)Chapter 13Firmsthat are also in one or more ofRAGs1 to 6 and not subject toIPRU(INV)Chapter 13Solvency statementNo standard format (note 11)Balance SheetFSA001/FINREP (Notes
SUP 16.12.22BGRP
13The column45 in the table in SUP 16.12.22A R that deals with IFPRU firms covers80 some liquidity items that only have to be reported by an ILAS BIPRU firm80 (see notes 18 and 24). (see notes 18 and 24).45454545454545
SUP 16.12.23ARRP
The applicable reporting frequencies for data items referred to in SUP 16.12.22A R are set out in the table below. Reporting frequencies are calculated from a firm'saccounting reference date, unless indicated otherwise.4545Data itemFrequencyUnconsolidated BIPRU investment firm and IFPRU investment firmSolo consolidated BIPRU investment firm andIFPRU investment firmUK Consolidation Group or defined liquidity groupAnnual regulated business revenue up to and including £5 millionAnnual
SUP 16.12.25ARRP
2The applicable data items referred to in SUP 16.12.4 R are set out according to type of firm in the table below:45Description of data itemFirms' prudential category and applicable data item(note 1)IFPRU investment firms and BIPRU firmsFirmsother thanBIPRU firms or IFPRU investment firmsIFPRUBIPRUIPRU(INV)Chapter 3IPRU(INV)Chapter 5IPRU(INV)Chapter 9IPRU(INV)Chapter 1338Solvency statement (note 11)No standard format38Balance sheetFSA001/FINREP (Notes 2 and 30)FSA001 (Note 2)FSA029FSA029FSA029Section
SUP 16.12.25BGRP
13The column45 in the table in SUP 16.12.25A R that deals45 with IFPRU firms45 cover some liquidity items that only have to be reported by an ILAS BIPRU firm (see notes 23 and 28).4545454545
SUP 16.12.26RRP
The applicable reporting frequencies for data items referred to in SUP 16.12.25A R are set out according to the type of firm2 in the table below. Reporting frequencies are calculated from a firm'saccounting reference date, unless indicated otherwise.45Data itemFirms' prudential categoryIFPRU 730K firmIFPRU 125K firmIFPRU 50K firmBIPRU firmUK consolidation group or defined liquidity groupFirms other than BIPRU firms or IFPRU investment firmsCOREP/FINREPRefer to EU CRR and applicable
BIPRU 8.4.1RRP
This section applies to a BIPRU firm1 with an investment firm consolidation waiver.1
BIPRU 8.4.1AGRP
1An investment firm consolidation waiver may be applied for by a BIPRU firm only.
BIPRU 8.4.2GRP
A BIPRU firm2 may apply for a waiver of the requirement in this chapter to apply capital requirements on a consolidated basis. Such a waiver is called an investment firm consolidation waiver.
BIPRU 8.4.4GRP
The FCA will not grant an investment firm consolidation waiver unless:(1) the UK consolidation group or non-EEA sub-group meets the conditions for being a CAD Article 22 group;(2) the FCA is satisfied that each BIPRU firm in the UK consolidation group or non-EEA sub-group will be able to meet its capital requirements using the calculation of capital resources in GENPRU 2 Annex 6R (Capital resources table for a BIPRU 2firm with a waiver from consolidated supervision); and(3) the
BIPRU 8.4.9RRP
(1) A CAD Article 22 group means a UK consolidation group or non-EEA sub-group that meets the conditions in this rule.(2) There must be no bank, building society or2credit institution2 in the UK consolidation group or non-EEA sub-group and any investment firm in the UK consolidation group or non-EEA sub-group must not be subject to consolidated supervision under the EU CRR2.11(3) Each CAD investment firm in the UK consolidation group or non-EEA sub-group which is an EEA firm
BIPRU 8.4.10GRP
GENPRU 2.2 (Capital resources) says that a BIPRU firm1 with an investment firm consolidation waiver should calculate its capital resources on a solo basis using GENPRU 2 Annex 6 (Capital resources table for a BIPRU firm with a waiver from consolidated supervision). GENPRU 2 Annex 6 requires a BIPRU firm1 to deduct contingent liabilities in favour of other members of the UK consolidation group or non-EEA sub-group. Therefore BIPRU 8.4.9R (5)(b) only imposes the requirement to deduct
BIPRU 8.4.13RRP
The solo notional capital resources requirement as referred to in BIPRU 8.4.11R (1) is calculated in the same way as the capital resources requirement for a BIPRU firm.1
SYSC 7.1.7BBGRP
15In setting the method of determining the remuneration of employees involved in the risk management function, BIPRU firms will also need to comply with the BIPRU Remuneration Code.
SYSC 7.1.10RRP
A BIPRUfirm 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.15
SYSC 7.1.11RRP
A BIPRUfirm must adequately diversify credit portfolios given its target market and overall credit strategy.15
SYSC 7.1.12GRP
The documentation maintained by a BIPRUfirm under SYSC 4.1.3 R should include its policy for credit risk, including its risk appetite and provisioning policy and should describe how it measures, monitors and controls that risk. This should include descriptions of the systems used to ensure that the policy is correctly implemented.
SYSC 7.1.13RRP
A BIPRUfirm must address and control by means of written policies and procedures the risk that recognised credit risk mitigation techniques used by it prove less effective than expected.15
SYSC 7.1.14RRP
A BIPRUfirm must implement policies and processes for the measurement and management of all material sources and effects of market risks.15
SYSC 7.1.15RRP
A BIPRU firm must implement systems to evaluate and manage the risk arising from potential changes in interest rates as they affect a BIPRUfirm's non-trading activities.15
SYSC 7.1.16RRP
A BIPRUfirm must implement policies and processes to evaluate and manage the exposure to operational risk, including to low-frequency high severity events. Without prejudice to the definition of operational risk, BIPRUfirms must articulate what constitutes operational risk for the purposes of those policies and procedures.15
BIPRU 12.9.1GRP
The appropriate regulator will give individual liquidity guidance to a standard ILAS BIPRU firm. Ordinarily, the appropriate regulator will give individual liquidity guidance after a review of a standard ILAS BIPRU firm'sILAA. The appropriate regulator will, however, issue individual liquidity guidance to such a firm whenever it is considered appropriate.
BIPRU 12.9.2GRP
In assessing the adequacy of an ILAS BIPRU firm's liquidity resources, the appropriate regulator draws on more than just a review of the submitted ILAA, or in the case of a simplified ILAS BIPRU firm, the submitted ILSA. Use is made of wider supervisory knowledge of a firm and of wider market developments and practices. When forming a view of the individual liquidity guidance to be given to an ILAS BIPRU firm, the appropriate regulator will also consider the regulator’s firm risk
BIPRU 12.9.4GRP
As part of the SLRP, the appropriate regulator will give a standard ILAS BIPRU firmindividual liquidity guidance advising it of the amount and quality of liquidity resources which the appropriate regulator considers are appropriate, having regard to the liquidity risk profile of that firm. In giving individual liquidity guidance, the appropriate regulator will also advise the firm of what it considers to be a prudent funding profile for the firm. In giving the firmindividual liquidity
BIPRU 12.9.5GRP
The appropriate regulator will ordinarily not expect to give individual liquidity guidance to a simplified ILAS BIPRU firm. However, if after review of such a firm'sILSA, the appropriate regulator is not satisfied that the simplified buffer requirement delivers an adequate amount and quality of liquidity resources for that firm, having regard to its liquidity risk profile, the appropriate regulator will issue the firm with individual liquidity guidance and may also consider revoking
BIPRU 12.9.6GRP
In giving individual liquidity guidance, the appropriate regulator seeks a balance between delivering consistent outcomes across the individual liquidity guidance that it gives to every ILAS BIPRU firm and recognising that such guidance should reflect the individual features of a firm. Comparison with the assumptions used by other firms will be used to trigger further enquiry.
BIPRU 12.9.7GRP
Following an internal validation process, the appropriate regulator will write to the standard ILAS BIPRU firm whose ILAA it has reviewed, providing both quantitative and qualitative feedback on the results of the appropriate regulator's assessment. This letter will notify that firm of the individual liquidity guidance that the appropriate regulator considers appropriate together with its reasons for concluding that such guidance is appropriate. The appropriate regulator will
BIPRU 12.9.10GRP
In relation to an incoming EEA firm or third country BIPRU firm, where the appropriate regulator gives that firmindividual liquidity guidance in relation to its UKbranch, it will have regard to the liquidity risk profile of the branch. In the absence of a whole-firm liquidity modification, the effect of BIPRU 12.2.1R (2)(b) and BIPRU 12.2.3 R is to require the firm to hold a liquid assets buffer of the amount identified as appropriate in its individual liquidity guidance (or in
BIPRU 12.9.12GRP
The appropriate regulator will examine any deviation on its own facts and will always want to understand clearly the reasons for that deviation and the firm's plans for remedying it. Deviation is, however, likely to prompt a re-examination by the appropriate regulator of the firm's compliance, and likely future compliance, with threshold conditions. The appropriate regulator will have regard to the information provided by the firm and to any other relevant factors in assessing
BIPRU 12.9.14RRP
For the purpose of BIPRU 12.9.13 R, the events in question are:(1) in the case of a simplified ILAS BIPRU firm only, breach of the simplified buffer requirement unless this has been superseded by individual liquidity guidance that it has accepted;1(2) in the case of a standard ILAS BIPRU firm or a simplified ILAS BIPRU firm, being a firm which in either case has accepted individual liquidity guidance given to it by the appropriate regulator:(a) its liquid assets buffer falling
BIPRU 12.6.1GRP
The appropriate regulator recognises that it may not always be appropriate to apply BIPRU 12.5 (Individual Liquidity Adequacy Standards) to every ILAS BIPRU firm. For a firm which operates a relatively simple business model, it may instead be appropriate to allow the firm to calculate the size and content of its liquid assets buffer according to a simplified approach prescribed in the Handbook in advance of any review of that firm'sliquidity risk conducted by the appropriate regulator.
BIPRU 12.6.2RRP
An ILAS BIPRU firm that wishes to operate the simplified ILAS approach must:(1) satisfy the conditions in BIPRU 12.6.6R to BIPRU 12.6.8R; and(2) obtain a simplified ILAS waiver from the appropriate regulator.
BIPRU 12.6.4RRP
A simplified ILAS BIPRU firm must calculate the size of its simplified buffer requirement in accordance with BIPRU 12.6.9Rto BIPRU 12.6.18R.
BIPRU 12.6.5GRP
The appropriate regulator is likely to regard a simplified ILAS BIPRU firm whose liquid assets buffer accords with the simplified buffer requirement as having an adequate buffer of assets and a prudent funding profile for the purpose of BIPRU 12.2.8R. However, the simplified ILAS approach does not relieve a simplified ILAS BIPRU firm from the obligation to hold liquidity resources which are adequate for the purpose of meeting the overall liquidity adequacy rule or from the obligation
BIPRU 12.6.9RRP
(1) A simplified ILAS BIPRU firm must ensure that the size of its liquid assets buffer is at all times greater than or equal to 50% of 6the amount produced by adding:(a) the wholesale net cash outflow component;(b) the retail and SME deposit3component; and(c) the credit pipeline component.(2) This is the simplified buffer requirement.
BIPRU 12.6.16RRP
(1) A simplified ILAS BIPRU firm may only include in its liquid assets buffer eligible government and designated multilateral development bank debt securities up to the value of the buffer securities restriction.(2) For the purpose of calculating the buffer securities restriction, a firm must:(a) calculate its daily net flow in government and designated multilateral development bank debt securities eligible as classes of assets for inclusion in the firm's liquid assets buffer;(b)
BIPRU 12.6.19GRP
The rules in BIPRU 12.7 set out the sorts of assets that are eligible for the liquid assets buffer of an ILAS BIPRU firm. Every ILAS BIPRU firm may include in its buffer reserves in the form of sight deposits at a central bank and high quality debt securities issued by governments and designated multilateral development banks subject to the eligibility rules in BIPRU 12.7. BIPRU 12.7 provides that a simplified ILAS BIPRU firm may also include in its buffer investments in a designated
BIPRU 12.6.20GRP
A simplified ILAS BIPRU firm may include in the liquid assets buffer any combination of the eligible assets permitted by the rules in BIPRU 12.7.
BIPRU 12.6.21RRP
(1) A simplified ILAS BIPRU firm must regularly carry out an ILSA which contains an assessment of the firm's compliance with the standards set out in BIPRU 12.3 and BIPRU 12.4, including the results of the stress tests required by the rules in BIPRU 12.4.(2) The firm must make a written record of its ILSA.(3) The ILSA must be proportionate to the nature, scale and complexity of that firm's activities.(4) The ILSA must take into account group-wide liquidity resources only to the
BIPRU 8.3.1RRP
(1) A BIPRU firm that is a subsidiary undertaking of a BIPRU firm or of a financial holding company or of a mixed financial holding company3 must apply the requirements laid down in GENPRU 1.2 (Adequacy of financial resources) and4 the main BIPRU firm Pillar 1 rules (but not the base capital resources requirement) on a sub-consolidated basis if the BIPRU firm, or the parent undertaking where it is a financial holding company or a mixed financial holding company3, have a third
BIPRU 8.3.8GRP
The sub-group of the BIPRU firm identified in BIPRU 8.3.7G (2)(a) or BIPRU 8.3.7G (2)(b) is a potential non-EEA sub-group.
BIPRU 8.3.9GRP
If more than one BIPRU firm is a direct or indirect parent undertaking in accordance with BIPRU 8.3.7G (2)(a) then the sub-groups of each of 1them are all potential non-EEA sub-groups.4
BIPRU 8.3.10GRP
Similarly if there is more than one BIPRU firm that holds a participation in the third country investment services undertaking4 in accordance with BIPRU 8.3.7G (2)(b) then the sub-group of each such BIPRU firm is a potential non-EEA sub-group.4
BIPRU 8.3.12GRP
The firm should then identify each undertaking in the firm'sUK consolidation group that satisfies the following conditions:(1) it isa CAD investment firm,4financial institution or asset management company whose head office is outside the EEA (a third country investment services undertaking);4(2) one of the following applies:(a) it is a subsidiary undertaking of a financial holding company in that UK consolidation group; or(b) a financial holding company in that UK consolidation
BIPRU 12.1.1ARRP
2Subject to BIPRU 12.1.2 R, BIPRU 12 applies to:(1) an IFPRU investment firm; and(2) a BIPRU firm.
BIPRU 12.1.3GRP
A firm that is an An exempt full scope IFPRU investment firm2 is not an ILAS BIPRU firm.2
BIPRU 12.1.6GRP
There are some provisions in other sections of BIPRU 12 which apply only to an ILAS BIPRU firm. Where this is the case, the provision in question says so.
BIPRU 12.1.7RRP
In relation to an incoming EEA firm or a third country BIPRU firm, this chapter applies only with respect to the activities of the firm'sUK branch.
BIPRU 1.1.1GRP
1There is no overall application statement for BIPRU. Each chapter or section has its own application statement. Broadly speaking however, BIPRU applies in the following manner8:8(1) [deleted]88(2) [deleted]8(3) to a BIPRU firm;88(3A) to an IFPRU investment firm, only BIPRU 12 (Liquidity standards); and8(4) in relation to8groups containing such firms:8(a) only BIPRU 12 (Liquidity standards) applies to the group containing any of the firms in (3) and (3A); and8(b) BIPRU as a whole
BIPRU 1.1.2AGRP
BIPRU applies to a collective portfolio management investment firm that is a BIPRU firm in parallel with IPRUINV link 11 (see IPRUINV link 11.6).8
BIPRU 1.1.7RRP
None of the following is a BIPRU firm:8(1) an incoming EEA firm;(2) an incoming Treaty firm;(3) any other overseas firm;(4) an ELMI;(5) an insurer; and(6) an ICVC.
BIPRU 1.1.7AGRP
8In summary, a BIPRU firm: (1) does not provide the ancillary service of safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management, and is not authorised to do so; (2) is not authorised to provide the following investment services: (a) to deal in any financial instruments for its own account; (b) to underwrite issues of financial instruments on a firm commitment basis; (c)
BIPRU 1.1.10GRP
(1) This paragraph applies to an undertaking that would be a third country BIPRU firm if it were authorised under the Act.(2) Except in exceptional circumstances, it is the appropriate regulator's policy that it will not give an overseas applicant a Part 4A permission unless the appropriate regulator is satisfied that the applicant will be subject to prudential regulation by its home state regulatory body that is broadly equivalent to that provided for in the Handbook and the
BIPRU 1.1.23RRP
(1) Dealing on own account means (for the purpose of GENPRU and BIPRU) 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).99(2) In accordance with article 5(2) of the Capital Adequacy Directive (Definition of dealing on own account), a CAD investment firm that executes investors' orders for financial instruments and holds such financial instruments for its own account does not for
GENPRU 1.2.1RRP
This section applies to a BIPRU firm.15(3) [deleted]55
GENPRU 1.2.14GRP
In the case of a BIPRU firm13 this section implements the third paragraph of article 95(2) of the EU CRR applying13 Article 34 of the Capital Adequacy Directive so far as that Article applies Article 123 of the Banking Consolidation Directive.1313
GENPRU 1.2.16GRP
This section also has rules requiring a firm to carry out appropriate stress tests and scenario analyses for the risks it has previously identified and to establish the amount of financial resources needed in each of the circumstances and events considered in carrying out the stress tests and scenario analyses. In the case of a BIPRU firm, the FCA15 will consider as part of its SREP whether the BIPRU firm should hold a capital planning buffer and, in such a case, the amount and
GENPRU 1.2.33RRP
(1) This rule amplifies some of the obligations in the overall Pillar 2 rule.(3) As part of its obligations in respect of market risk, a BIPRU 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.(4) The processes, strategies and systems required by the overall Pillar 2 rule must
GENPRU 1.2.42RRP
(1) As part of its obligation under the overall Pillar 2 rule, a firm must, for the major sources of risk identified in accordance with GENPRU 1.2.30R (2), carry out stress tests and scenario analyses that are appropriate to the nature, scale and complexity6 of those major sources of risk and to the nature, scale and complexity of the firm's business.666(a) [deleted]66(b) [deleted]66(i) [deleted]66(ii) [deleted]66(iii) [deleted]66(iv) [deleted]66(2) In carrying out the stress
GENPRU 1.2.42BGRP
6A BIPRU firm with an IRB permission which has any material credit exposures excluded from its IRB models should also include these exposures in its stress and scenario testing to meet its obligations under the general stress and scenario testing rule. A BIPRU firm without an IRB permission,15 should conduct analyses to assess risks to the credit quality of its counterparties, including any protection sellers, considering both on and off-balance sheet exposures.
GENPRU 1.2.62GRP
Where a firm assesses the adequacy of its CRR in its particular circumstances in accordance with BIPRU 2.2 (Internal capital adequacy standards)15 as a basis for deciding what financial resources are adequate, it should include this in the documentation produced in accordance with GENPRU 1.2.60 R.
GENPRU 1.2.70GRP
Where a firm is exposed to market risk, the6 time horizon over which stress tests and scenario analyses 6should be carried out will 6depend on, among other things,6 the maturity and liquidity of the positions stressed. For example, for the market risk arising from the holding of investments, this will 6depend upon:6666(1) the extent to which there is a regular, open and transparent market in those assets, which would allow fluctuations in the value of the investment to be more
BIPRU 12.3.3GRP
BIPRU 12.5.4R provides that, in relation to a standard ILAS BIPRU firm, it must include in its ILAA an assessment of its compliance with the standards set out in BIPRU 12.3and BIPRU 12.4, including the results of the stress tests required by the rules in BIPRU 12.4. A simplified ILAS BIPRU firm is not subject to BIPRU 12.5 and consequently it is not required to prepare an ILAA. Instead, the rules in BIPRU 12.6 provide that such a firm is to carry out an ILSA, being alone an assessment
BIPRU 12.3.4AGRP
2The strategies, policies, processes and systems referred to in BIPRU 12.3.4 R should include those which enable it to assess and maintain on an ongoing basis the amounts, types and distribution of liquidity resources that it considers adequate to cover:(1) the nature and level of the liquidity risk to which it is or might be exposed;(2) the risk that the firm cannot meet its liabilities as they fall due; and(3) in the case of an ILAS BIPRU firm, the risk that its liquidity resources
BIPRU 12.3.7GRP
As well as the rules in BIPRU 12.3 requiring a firm to have robust systems to enable it to identify, measure, manage and monitor liquidity risk, an ILAS BIPRU firm is also subject to obligations in SUP 16 (Reporting requirements) requiring it to report quantitative data about its liquidity position to the appropriate regulator. That chapter of SUP sets out the applicable data items and the rules governing the frequency of their submission to the appropriate regulator. Absent a
BIPRU 12.3.9GRP
As part of the SLRP, the appropriate regulator will assess the appropriateness of the liquidity risk tolerance adopted by an ILAS BIPRU firm to ensure that this risk tolerance is consistent with maintenance by the firm of adequate liquidity resources for the purpose of the overall liquidity adequacy rule. The appropriate regulator will expect a firm to provide it with an adequately reasoned explanation for the level of liquidity risk which that firm'sgoverning body has decided
BIPRU 12.3.14GRP
The appropriate regulator will assess the adequacy of an ILAS BIPRU firm'sliquidity risk management framework as part of the SLRP.
BIPRU 8.7.23RRP
(1) A firm may only treat an exposure as exempt under BIPRU 3.2.25 R (Zero risk-weighting for intra-group exposures) as applied on a consolidated basis if the member of the UK consolidation group or non-EEA sub-group that has the exposure:(a) is a BIPRU firm and that exposure is exempt under BIPRU 3.2.25 R as it applies to that BIPRU firm on a solo basis; or(b) meets the conditions in BIPRU 3.2.25 R (1)(d) (Condition relating to establishment in the UK) and that exposure would
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 8.7.31GRP
If a firm is calculating a risk capital requirement for an undertaking that is not a BIPRU firm it should calculate it as if the undertaking were a BIPRU firm.
BIPRU 8.5.1RRP
A firm must include only the following types of undertaking in a UK consolidation group or non-EEA sub-group for the purposes of this chapter:(1) a BIPRU firm;(2) [deleted]44(3) a financial institution;(4) an asset management company;(5) a financial holding company;3(6) a mixed financial holding company; and33(7) an ancillary services undertaking.3
BIPRU 8.5.9RRP
A firm may, having first notified the appropriate regulator in writing in accordance with SUP 15.7 (Form and method of notification), exclude a BIPRU firm,4asset management company, financial institution or ancillary services undertaking that is a subsidiary undertaking in, or an undertaking in which a participation is held by, the UK consolidation group or non-EEA sub-group if the balance sheet total of that undertaking is less than the smaller of the following two amounts:4(1)
BIPRU 8.5.11GRP
Article 73(1) of the Banking Consolidation Directive allows the appropriate regulator to decide to exclude a BIPRU firm,4financial institution, asset management company or ancillary services undertaking that is a subsidiary undertaking in, or an undertaking in which a participation is held by, the UK consolidation group or non-EEA sub-group for the purposes of this chapter in the following circumstances:4(1) where the head office of the undertaking concerned is situated in a country
A collective portfolio management investment firm is required to comply with the applicable requirements of either of the following sourcebooks in addition to complying with IPRU-INV 11: (1) GENPRU and BIPRU if it is a BIPRU firm; or(2) IFPRU if it is IFPRU investment firm.
(1) A collective portfolio management investment firm may undertake the following MiFID business: portfolio management; investment advice; safekeeping and administration in relation to shares or units of collective investment undertakings; and (if it is an AIFM investment firm) reception and transmission of orders in relation to financial instruments.(2) Subject to the conditions that the firm is not authorised to provide safekeeping and administration in relation to shares or
(1) When a collective portfolio management investment firm that is a BIPRU firm calculates the credit risk capital requirement and the market risk capital requirement for the purpose of calculating the variable capital requirement under GENPRU 2.1.40R it must do so only in respect of designated investment business. For this purpose, managing an AIF or managing a UCITS is excluded from designated investment business. (2) Generally, BIPRU only applies to a collective portfolio
SYSC 19C.1.1RRP
(1) The BIPRU Remuneration Code applies to a BIPRU firm and a third country BIPRU firm.(2) In relation to a third country BIPRU firm, the BIPRU Remuneration Code applies only in relation to activities carried on from an establishment in the United Kingdom.
SYSC 19C.1.1AGRP
1The AIFM Remuneration Code (SYSC 19B) also applies to a BIPRU firm which is a full-scope UK AIFM (ie, a full-scope UK AIFM that is an AIFM investment firm subject to BIPRU). Such a full-scope UK AIFM that complies with SYSC 19B will also comply with SYSC 19C. In such cases, the FCA will not require the full-scope UK AIFM to demonstrate compliance with SYSC 19C.
SYSC 19C.1.1BGRP
(1) 2The UCITS Remuneration Code (SYSC 19E) also applies to a BIPRU firm that is a UK UCITS management company (that is, a UK UCITS management company that is a UCITS investment firm subject to BIPRU).(2) A BIPRU firm that is a UK UCITS management company will meet its obligations under SYSC 19C and SYSC 19E by complying with SYSC 19E. (3) Under (1) and (2), the FCA will not require the UK UCITS management company to demonstrate compliance with SYSC 19C.
IFPRU 7.1.4GRP
Pending specification of a uniform definition under article 460 of the EU CRR (Liquidity) of high and extremely high liquidity and credit quality, a firm should be guided by BIPRU 12 (Liquidity standards) when complying with article 416 of the EU CRR (Reporting on liquid assets).
IFPRU 7.1.5RRP
For the purpose of article 6(4) of the EU CRR, a firm is exempt from compliance with the obligations in Part Six of the EU CRR (Liquidity) on an individual basis unless it meets both the following conditions:(1) it is an ILAS BIPRU firm; and(2) it is a significant IFPRU firm.
SUP 16.7A.3RRP
A firm in the RAG in column (1) and which is a type of firm in column (2) must submit its annual report and accounts to the FCA annually on a single entity basis. (1)(2)RAGFirm type1UK bankDormant account fund operatorNon-EEA bank2.2The Society3IFPRU investment firmsBIPRU firmsExempt CAD firms subject to IPRU (INV) Chapter 13All other firms subject to the following chapters in IPRU(INV):(1)Chapter 3(2)Chapter 5(3)Chapter 94IFPRU investment firmsBIPRU firmsExempt CAD firms subject
SUP 16.7A.5RRP
A firm in the RAG group in column (1), which is a type of firm in column (2) and whose ultimate parent is a mixed activity holding company must: (1) submit the annual report and accounts of the mixed activity holding company to the FCA annually; and(2) notify the FCA that it is covered by this reporting requirement by email using the email address specified in SUP 16.3.10 G (3), by its accounting reference date.(1)(2)RAGFirm type1UK bank3IFPRU investment firmBIPRU firm4IFPRU investment