Related provisions for GENPRU 2.2.10

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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 2.2.28RRP
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 2.2.63RRP
The categories referred to in GENPRU 2.2.62R (1) are:(1) permanent share capital;(2) eligible partnership capital;(3) eligible LLP members' capital;(4) sole trader capital;(5) [deleted]188(6) [deleted]88(7) [deleted]1888(8) 18hybrid capital.8
GENPRU 2.2.64RRP
The conditions that an item of capital of a firm must comply with under GENPRU 2.2.62R (2)1 are as follows:(1) it is issued by the firm;(2) it is fully paid and the proceeds of issue are immediately and fully available to the firm;(3) it:(a) cannot be redeemed at all or can only be redeemed on a winding up of the firm; or(b) complies with the conditions in GENPRU 2.2.70 R (Basic requirements for redeemability)21;(4) the item of capital meets the following conditions in relation
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 2.2.79ARRP
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 2.2.79DRRP
8GENPRU 2.2.79AR (4) does not apply if:10(1) the firm intends to hold the purchased instrument for a temporary period as market maker; and(2) the purchased instruments held by the firm do not exceed the lower of:(a) 10% of the relevant issuance; or(b) 3% of the firm's total issued hybrid capital.
GENPRU 2.2.79FRRP
8For the purposes of calculating its tier one capital resources, a firm must deduct the amount of any item of hybrid capital which it then holds.
GENPRU 2.2.82GRP
There are additional loss absorption requirements for18hybrid capital8 in GENPRU 2.2.116AR18 to GENPRU 2.2.118 R (Other tier one capital: loss absorption) and18 for core tier one capital in GENPRU 2.2.83AR (9) to (10) (General conditions for eligibility of capital instruments as core tier one capital18).10888
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
8For the purposes of GENPRU 2.2.118R (2), the focus of the legal opinion in considering GENPRU 2.2.64R (6)(b) should be on whether appropriate mechanisms exist and are designed to operate to ensure that the value of the hybrid capital instrument and the position of the hybrid capital holder are not enhanced by recapitalisation.
BIPRU 11.5.3RRP
A firm must disclose the following information regarding its capital resources:(1) summary information on the terms and conditions of the main features of all capital resources items and components thereof, including:2(a) 2hybrid capital;(b) 2capital instruments which provide an incentive for the firm to redeem them; and(c) 2capital instruments which the firm treats as tier one capital under GENPRU TP8A;(2) tier one capital resources, with separate disclosure of:22(a) 2all positive