Related provisions for IFPRU 2.2.11

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IFPRU 2.3.2GRP
For the purpose of IFPRU 2.3, "capital" refers to a firm's financial resources, own funds and internal capital, all as referred to in the overall Pillar 2 rule.
IFPRU 2.3.4GRP
The obligation to conduct an ICAAP includes requirements on a firm to: (1) carry out regularly assessments of the amounts, types and distribution of financial resources, own funds and internal capital that it considers adequate to cover the nature and level of the risks to which it is or might be exposed (IFPRU 2.2.1 R to IFPRU 2.2.6 G (the overall Pillar 2 rule and related rules)); (2) identify the major sources of risk to its ability to meet its liabilities as they fall due
IFPRU 2.3.10GRP
As part of its SREP, the FCA will consider whether the amount and quality of capital which a firm should hold to meet its own funds requirements in the EUCRR is sufficient for that firm to comply with the overall financial adequacy rule.
IFPRU 2.3.17GRP
The FCA will not give individual capital guidance to the effect that the amount of capital advised in that guidance is lower than the amount of capital which a firm should hold to meet its own funds requirements.
IFPRU 2.3.20GRP
Individual capital guidance may refer to two types of own funds:(1) General capital. It refers to total common equity tier 1 capital and additional tier 1 capital after applying deductions and prudential filters under the EUCRR.(2) Total capital. It refers to total common equity tier 1 capital, additional tier 1 capital and tier 2 capital after applying deductions and prudential filters under the EUCRR.
IFPRU 2.3.34GRP
(1) This paragraph applies to a firm that is not a significant IFPRU firm (see IFPRU 1.2.3 R) whose activities are simple and primarily not credit-related.(2) In carrying out its ICAAP it could: (a) identify and consider that firm's largest losses over the last three to five years and whether those losses are likely to recur;(b) prepare a short list of the most significant risks to which that firm is exposed;(c) consider how that firm would act, and the amount of capital that
IFPRU 2.3.35GRP
For a firm that is a significant IFPRU firm (see IFPRU 1.2.3 R1) and whose activities are moderately complex, in carrying out its ICAAP, IFPRU 2.3.34 G (2) to IFPRU 2.3.34 G (4) apply. In addition, it could: 1(1) having consulted the management in each major business line, prepare a comprehensive list of the major risks to which the business is exposed;(2) estimate, with the aid of historical data, where available, the range and distribution of possible losses which might arise
IFPRU 2.3.38GRP
(1) A firm may take into account factors other than those identified in the overall Pillar 2 rule when it assesses the level of capital it wishes to hold. These factors might include external rating goals, market reputation and its strategic goals. However, a firm should be able to distinguish, for the purpose of its dialogue with the FCA, between capital it holds to comply with the overall financial adequacy rule, capital it holds as a capital planning buffer and capital held
IFPRU 2.3.49GRP
To assess its expected capital requirements over the economic and business cycles, a firm may wish to project forward its financial position taking account of its business strategy and expected growth, according to a range of assumptions regarding the economic or business environment which it faces. For example, an ICAAP should include an analysis of the impact that the actions of a firm's competitors might have on its performance, in order to see what changes in its environment
IFPRU 2.3.52RRP
If IFPRU 2.3.50 Rapplies to a firm on a consolidated basis, the following adjustments are made to IFPRU 2.3.50 R in accordance with the general principles of Part One, Title II, Chapter 2 of the EU CRR (Prudential consolidation): (1) references to own funds are to the consolidated own funds of the firm's FCA consolidation group or, as the case may be, its non-EEA sub-group; and(2) references to the capital requirements in Part Three of the EU CRR (Capital requirements) are to
IFPRU 2.3.54GRP
The countervailing factors and off-setting actions that a firm may rely on as referred to in IFPRU 2.3.53 G include, but are not limited to, projected balance sheet shrinkage, growth in own funds resulting from retained profits between the date of the stress test and the projected start of the economic downturn, the possibility of raising new capital in a downturn, the ability to reduce dividend payments or other distributions, and the ability to allocate capital from other risks
IFPRU 2.2.1RRP
A firm must, at all times, maintain overall financial resources and internal capital, including own funds and liquidity resources which are adequate both as to amount and quality to ensure there is no significant risk that its liabilities cannot be met as they fall due.
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 2.2.40GRP
In carrying out the stress tests and scenario analyses under IFPRU 2.2.37 R (1), a firm should also consider any impact of the adverse circumstances on its own funds. In particular, a firm should consider the capital ratios in article 92 of the EU CRR (Own funds requirements) where its common equity tier 1 capital and additional tier 1 capital is eroded by the event.
IFPRU 2.2.51RRP
For the purpose of the ICAAPrules as they apply on a consolidated basis or on a sub-consolidated basis: (1) the firm must ensure that the FCA consolidation group has the processes, strategies and systems required by the overall Pillar 2 rule;(2) the risks to which the overall Pillar 2 rule and the general stress and scenario testing rule refer are those risks as they apply to each member of the FCA consolidation group;(3) the reference in the overall Pillar 2 rule to amounts
IFPRU 2.2.52RRP
(1) This rule relates to the assessment of the amounts, types and distribution of financial resources, own funds and internal capital (referred to in this rule as "resources") under the overall Pillar 2 rule as applied on a consolidated basis and to the assessment of diversification effects as referred to in IFPRU 2.2.14 R (3)(b) as applied on a consolidated basis.(2) A firm must be able to explain how it has aggregated the risks referred to in the overall Pillar 2 rule and the
IFPRU 2.2.53RRP
(1) A firm must allocate the total amount of financial resources, own funds and internal capital identified as necessary under the overall Pillar 2 rule (as applied on a consolidated basis) between different parts of the FCA consolidation group. IFPRU 2.2.11 R (Identifying different tiers of capital) does not apply to this allocation(2) The firm must carry out the allocation in (1) in a way that adequately reflects the nature, level and distribution of the risks to which the group
IFPRU 2.2.73GRP
(1) In identifying an appropriate range of adverse circumstances and events in accordance with IFPRU 2.2.37 R (2):(a) a firm will need to consider the cycles it is most exposed to and whether these are general economic cycles or specific to particular markets, sectors or industries;(b) for the purposes of IFPRU 2.2.37 R (2)(a), the amplitude and duration of the relevant cycle should include a severe downturn scenario based on forward-looking hypothetical events, calibrated against
A firm must, at all times, maintain a combination of professional indemnity insurance and own funds, at least equal to the requirements in this chapter for professional indemnity insurance and initial capital.
A firm'sinitial capital: minus the sum of the items set out against Bplus the sum of the items set out against Cminus material holdings in credit and financial institutions and material insurance holdingsequals own funds.
Perpetual cumulative preference share capital may not be included in the calculation of own funds unless it meets the following requirements: (1) it may not be reimbursed on the holder's initiative or without the prior agreement of the FSA; (2) the instrument must provide for the firm to have the option of deferring the dividend payment on the share capital; (3) the shareholder's claims on the firm must be wholly subordinated
(1) In calculating own funds:(i) the total amount of revaluation reserves, perpetual cumulative preference share capital, long-term subordinated loans and fixed term preference share capital must not exceed 100% of initial capital minus the sum of the items set out against B; and (ii) the total amount of fixed term preference share capital and long-term subordinated loans must not exceed 50% of initial capital minus the sum of the items set out against B.
IFPRU 3.2.8RRP
A firm must demonstrate to the FCA that any additional tier 1 instrument or tier 2 instrument issued by it that is governed by the law of a third country is by its terms capable, as part of a resolution of the firm, of being written down or converted into a common equity tier 1 instrument of the firm to the same extent as an equivalent own funds instrument issued under the law of the UK.
IFPRU 3.2.10RRP
A firm must notify the FCA of the following:(1) its intention; or(2) the intention of another member of its group that is not a firm, but is included in the supervision on a consolidated basis of the firm;to issue a capital instrument that it believes will qualify under the EUCRR as own funds other than a common equity tier 1 capital at least one month before the intended date of issue.
IFPRU 3.1.5GRP
Principle 4 requires a firm to maintain adequate financial resources. IFPRU 3 sets out provisions that deal specifically with the adequacy of that part of a firm's financial resources that consists of own funds in addition to Parts Two (Own Funds) and Three (Capital requirements) of the EUCRR.
IFPRU 3.1.7RRP
At the time that it first becomes an IFPRU investment firm, a firm must hold initial capital of not less than the base own funds requirement applicable to that firm.
IFPRU 8.1.18GRP
For the purpose of article 113(6)(e) of the EU CRR, for an undertaking that is a firm, the requirement for the prompt transfer of funds refers to own funds in excess of the capital and financial resources requirements to which it is subject under the regulatory system.
IFPRU 8.1.19GRP
When demonstrating how article 113(6)(e) of the EU CRR is met, the FCA considers that, for a counterparty which is not a firm, the application should include a legally binding agreement between the firm and the counterparty. This agreement will be to promptly, on demand, by the firm increase the firm'sown funds by an amount required to ensure that the firm complies with the provisions contained in Part Two of the EU CRR (Own funds) and any other requirements relating to capital
The funds under management requirement is (subject to a maximum of EUR 10,000,000) the sum of: (1) the base own funds requirement; plus(2) 0.02% of the amount by which the funds under management exceed EUR 250,000,000,[Note: article 9(3) of AIFMD and article 7(1)(a)(i) of the UCITS Directive]
IFPRU 4.12.41GRP
The FCA will seek to ensure that the securitisation framework is not used to undermine or arbitrage other parts of the prudential framework. For other similar credit protection arrangements (eg, those subject credit risk mitigation or trading book requirements), the impact of certain features (such as significant premiums or call options) may cast doubt on the extent of risk transferred and the resulting capital assessment. Features which result in inadequate own funds requirements
IPRU-INV 9.5.8RRP
(1) In calculating own funds: (i) the total amount of revaluation reserves, perpetual cumulative preference share capital, long-term subordinated loans, perpetual long-term subordinated loans and fixed term preference share capital must not exceed 100% of initial capital minus B; and (ii) the total amount of fixed term preference share capital and long-term subordinated loans must not exceed 50% of initial capital minus B.
IPRU-INV 9.2.8RRP
A local firm must: (a) have initial capital of EUR 50,000; and [Note: Article 67(2) of MiFID and article 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.
IFPRU 4.6.1GRP
'Rating philosophy' describes the point at which a rating system sits on the spectrum between the stylised extremes of a point in time (PiT) rating system and a through-the-cycle (TTC) rating system. To explain these concepts:(1) PiT: a firm seeks to explicitly estimate default risk over a fixed period, typically one year. Under such an approach, the increase in default risk in a downturn results in a general tendency for migration to lower grades. When combined with the fixed
For the purposes of the provisions relating to professional indemnity insurance, "additional capital resources" means readily realisable own funds. The FCA expects items included in own funds to be regarded as "readily realisable" only if they can be realised, at any given time, within 90 days.
A firm may apply for a waiver of rule 14.4.1 to permit an aggregation approach to determine groupfinancial resources. Any waiver application should guarantee future compliance with any relevant own funds limit.
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
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]
IFPRU 11.7.4RRP
A firm or qualifying parent undertaking must notify the FCA by sending an e-mail to its usual supervisory contact.