Related provisions for MIPRU 3.2.11

MIPRU 3.2.1R01/11/2007

A firm must take out and maintain professional indemnity insurance that is at least equal to the requirements of this section from:(1) an insurance undertaking authorised to transact professional indemnity insurance in the EEA; or(2) a person of equivalent status in:(i) a Zone A country; or(ii) the Channel Islands, Gibraltar, Bermuda or the Isle of Man.[Note: Article 4(3) of the Insurance Mediation Directive2]2

MIPRU 3.2.2G06/04/2007

The minimum limits of indemnity for a firm whose Part IV permission covers both insurance mediation activity and home finance mediation activity1is the higher of the limits of indemnity for these activities. If the firm opts for a single comparable guarantee to finance the claims which might arise as a result of both activities, the requirements for insurance mediation activity apply.1

MIPRU 3.2.3G01/01/2007

A non-EEA firm (such as a captive insurance company outside the EEA) will be able to provide professional indemnity insurance only if it is authorised to do so in one of the specified countries or territories.. The purpose of this provision is to balance the level of protection required for the policyholder against a reasonable level of flexibility for the firm.

MIPRU 3.2.4R06/04/2007

The contract of professional indemnity insurance must incorporate terms which make provision for:(1) cover in respect of claims for which a firm may be liable as a result of the conduct of itself, its employees and its appointed representatives (acting within the scope of their appointment);(2) the minimum limits of indemnity per year set out in this section;(3) an excess as set out in this section;(4) appropriate cover in respect of legal defence costs;(5) continuous cover in

MIPRU 3.2.7R01/03/2009

If the firm is an insurance intermediary, then the minimum limits of indemnityare:(1) for a single claim, €1,120,200 3; and3(2) in aggregate, €1,680,3003 or, if higher, 10% of annual income up to £30 million.3[Note: Article 4(3) of the Insurance Mediation Directive2]2

MIPRU 3.2.7AG01/03/2009

3Article 4(7) of the Insurance Mediation Directive requires the limits of indemnity to be reviewed every five years to take into account movements in European consumer prices. These limits will therefore be subject to further adjustments on the basis of index movements advised by the European Commission.

MIPRU 3.2.8R01/01/2007

If a policy is denominated in any currency other than euros, a firm must take reasonable steps to ensure that the limits of indemnity are, when the policy is effected and at renewal, at least equivalent to those required.

MIPRU 3.2.9R06/04/2007

If the firm is a home finance intermediary,1 then the minimum limit of indemnity is the higher of 10% of annual income up to £1 million, and:1(1) for a single claim, £100,000; or(2) in aggregate, £500,000.

MIPRU 3.2.12R01/01/2007

For a firm which holds client money or other client assets, the excess must not be more than the higher of:(1) £5,000; and(2) 3% of annual income.

MIPRU 3.2.13R01/01/2007

If a policy provides cover to more than one firm, then:(1) the limits of indemnity must be calculated on the combined annual income of all the firms named in the policy; and(2) each firm named in the policy must have the benefit of the relevant minimum limits of indemnity.

MIPRU 3.2.14R01/01/2007

If a firm seeks to have an excess which is higher than the relevant limit, it must hold additional capital as calculated in accordance with the appropriate table below:

Table: Calculation of additional capital for firm not holding client money or other client assets (£000's)

Income		Excess obtained up to and including:
More than	Up to	2.5	5	10	15	20	25	30	40	50	75	100	150	200+
0	100	0	5	9	12	14	17	19	23	26	33	39	50	59
100	200	0	7	12	16	19	22	25	30	34	43	51	64	75
200	300	0	7	12	16	20	24	27	32	37	47	56	71	84
300	400	0	0	12	16	21	24	28	34	39	50	60	77	91
400	500	0	0	11	16	21	24	28	34	40	53	63	81	96
500	600	0	0	10	16	20	24	28	35	41	54	65	84	100
600	700	0	0	0	15	20	24	28	35	41	55	67	87	104
700	800	0	0	0	14	19	24	28	35	42	56	68	89	107
800	900	0	0	0	13	18	23	27	35	42	56	69	91	109
900	1,000	0	0	0	0	17	22	27	34	41	57	70	92	111
1,000	1,500	0	0	0	0	0	21	26	34	41	57	71	97	118
1,500	2,000	0	0	0	0	0	0	0	30	38	56	71	98	121
2,000	2,500	0	0	0	0	0	0	0	24	33	53	69	99	126
2,500	3,000	0	0	0	0	0	0	0	0	28	50	68	101	130
3,000	3,500	0	0	0	0	0	0	0	0	0	47	67	101	132
3,500	4,000	0	0	0	0	0	0	0	0	0	43	65	101	133
4,000	4,500	0	0	0	0	0	0	0	0	0	39	62	101	134
4,500	5,000	0	0	0	0	0	0	0	0	0	0	58	99	134
5,000	6,000	0	0	0	0	0	0	0	0	0	0	54	97	133
6,000	7,000	0	0	0	0	0	0	0	0	0	0	0	91	131
7,000	8,000	0	0	0	0	0	0	0	0	0	0	0	84	126
8,000	9,000	0	0	0	0	0	0	0	0	0	0	0	75	120
9,000	10,000	0	0	0	0	0	0	0	0	0	0	0	0	113
10,000	100,000	0	0	0	0	0	0	0	0	0	0	0	0	0
100,000	n/a	0	0	0	0	0	0	0	0	0	0	0	0	0

Table: Calculation of additional capital for firm holding client money or other client assets (£000's)

Income		Excess obtained up to and including:
More than	Up to	5	10	15	20	25	30	40	50	75	100	150	200+
0	100	0	4	7	9	12	14	18	21	28	34	45	54
100	200	0	7	11	14	17	20	25	29	38	46	59	70
200	300	0	7	11	14	17	20	25	30	40	49	64	77
300	400	0	0	9	13	16	19	25	30	40	50	67	81
400	500	0	0	0	11	14	18	24	29	40	51	68	83
500	600	0	0	0	8	12	15	22	28	40	51	69	85
600	700	0	0	0	0	9	13	20	26	39	50	69	86
700	800	0	0	0	0	6	10	17	24	38	49	69	87
800	900	0	0	0	0	0	7	15	22	36	48	69	87
900	1,000	0	0	0	0	0	0	12	19	34	47	68	87
1,000	1,500	0	0	0	0	0	0	0	16	32	45	67	86
1,500	2,000	0	0	0	0	0	0	0	0	18	34	59	81
2,000	2,500	0	0	0	0	0	0	0	0	0	19	48	71
2,500	3,000	0	0	0	0	0	0	0	0	0	6	37	64
3,000	3,500	0	0	0	0	0	0	0	0	0	0	26	55
3,500	4,000	0	0	0	0	0	0	0	0	0	0	14	45
4,000	4,500	0	0	0	0	0	0	0	0	0	0	1	33
4,500	5,000	0	0	0	0	0	0	0	0	0	0	0	21
5,000	6,000	0	0	0	0	0	0	0	0	0	0	0	8
6,000	7,000	0	0	0	0	0	0	0	0	0	0	0	0
7,000	8,000	0	0	0	0	0	0	0	0	0	0	0	0
8,000	9,000	0	0	0	0	0	0	0	0	0	0	0	0
9,000	10,000	0	0	0	0	0	0	0	0	0	0	0	0
10,000	100,000	0	0	0	0	0	0	0	0	0	0	0	0
100,000	n/a	0	0	0	0	0	0	0	0	0	0	0	0

MIPRU 3.1.1R01/11/2007

2This chapter applies to a firm with Part IV permission to carry on any of the activities:(1) insurance mediation activity;(2) home finance mediation activity;1unless any of the following exemptions apply:1(3) in relation to insurance mediation activity, this chapter does not apply to a firm if another authorised person which has net tangible assets of more than £10 million provides a comparable guarantee; for this purpose:(a) if the firm is a member of a group in which there

MIPRU 3.1.3G01/01/2007

The purposes of this chapter are to:(1) implement article 4.3 of the Insurance Mediation Directive in so far as it requires insurance intermediaries to hold professional indemnity insurance, or some other comparable guarantee, against any liability that might arise from professional negligence; and(2) meet the regulatory objectives of consumer protection and maintaining market confidence by ensuring that firms have adequate resources to protect themselves, and their customers,

MIPRU 3.1.4G01/01/2007

Any breach in the duty of a firm or of its agents under the regulatory system or civil law can give rise to claims being made against the firm. Professional indemnity insurance has an important role to play in helping to finance such claims. In so doing, this chapter amplifies threshold condition 4 (Adequate resources). This threshold condition provides that a firm must have, on a continuing basis, resources that are, in the opinion of the FSA, adequate in relation to the regulated

MIPRU 3.1.6G01/01/2007

Although financial resources and appropriate systems and controls can generally mitigate operational risk, professional indemnity insurance has a role in mitigating the risks a firm faces in its day to day operations, including those arising from not meeting the legally required standard of care when advising on investments. The purpose of this chapter is to ensure that a firm has in place the type, and level, of professional indemnity insurance necessary to mitigate these ri

SUP 16.12.22AR01/12/2009

2The applicable data items referred to in SUP 16.12.4 R are set out according to type of firm in the table below:

11Description ofData item	Firm prudential category and applicable data item (note 1)
	BIPRU 730K firm	BIPRU 125K firmandUCITS investment firm	BIPRU 50K firm	Exempt CAD firmssubject toIPRU(INV)Chapter 13	Firms(other thanexempt CAD firms) subject toIPRU(INV)Chapter 13	Firmsthat are also in one or more ofRAGs1 to 6 and not subject toIPRU(INV)Chapter 13
Annual report and accounts	No standard format			No standard format
Annual report and accounts of the mixed-activity holding company (note 10)	No standard format
Solvency statement	No standard format (note 11)
Balance Sheet	FSA001 (note 2)	FSA001 (note 2)	FSA001 (note 2)		Section A RMAR
Income Statement	FSA002 (note 2)	FSA002 (note 2)	FSA002 (note 2)	Section B RMAR	Section B RMAR
Capital Adequacy	FSA003 (note 2)	FSA003 (note 2)	FSA003 (note 2)	FSA032	Section D1 and D2 RMAR
Credit risk	FSA004 (notes 2, 3)	FSA004 (notes 2, 3)	FSA004 (notes 2, 3)
Market risk	FSA005 (notes 2, 4)	FSA005 (notes 2, 4)	FSA005 (notes 2, 4)
Market risk - supplementary	FSA006 (note 5)	FSA006 (note 5)	FSA006 (note 5)
Operational risk	FSA007 (notes 2, 6, 7)	FSA007 (notes 2, 6, 7)	FSA007 (notes 2, 6, 7)
Large exposures	FSA008 (note 2)	FSA008 (note 2)	FSA008 (note 2)
UK integrated group large exposures	FSA018 (note 12)	FSA018 (note 12)	FSA018 (note 12)
Solo consolidation data	FSA016	FSA016	FSA016
Pillar 2 questionnaire	FSA019 (note 8)	FSA019 (note 8)	FSA019 (note 8)
Non-EEA sub-group	FSA028 (note 9)	FSA028 (note 9)	FSA028 (note 9)
Professional indemnity insurance (note 15)	Section E RMAR	Section E RMAR	Section E RMAR		Section E RMAR	Section E RMAR
Threshold Conditions				Section F RMAR	Section F RMAR
Training and Competence	Section G RMAR	Section G RMAR	Section G RMAR	Section G RMAR	Section G RMAR	Section G RMAR
COBS data	Section H RMAR	Section H RMAR	Section H RMAR	Section H RMAR	Section H RMAR	Section H RMAR
Client money and client assets	Section C RMAR	Section C RMAR	Section C RMAR	Section C RMAR	Section C RMAR
Fees and levies	Section J RMAR	Section J RMAR	Section J RMAR	Section J RMAR	Section J RMAR
IRB portfolio risk	FSA045 (note 13)	FSA045 (note 13)	FSA045 (note 13)
Securitisation	FSA046 (note 14)	FSA046 (note 14)	FSA046 (note 14)
13Daily Flows	FSA047 (Notes 16, 19 and 21)
13Enhanced Mismatch Report	FSA048 (Notes 16, 19 and 21)
13Liquidity Buffer Qualifying Securities	FSA050 (Notes 17, 20 and 21)
13Funding Concentration	FSA051 (Notes 17, 20 and 21)
13Pricing data	FSA052 (Notes 17, 20 and 21)
13Retail and corporate funding	FSA053 (Notes 17, 20 and 21)
13Currency Analysis	FSA054 (Notes 17, 20 and 21)
13Systems and Controls Questionnaire	FSA055 (Note 18)
Note 1	When submitting the completed data item required, a firm must use the format of the data item set out in SUP 16 Annex 24 R, or SUP 16 Annex 18A R in the case of the RMAR. Guidance notes for completion of the data items are contained in SUP 16 Annex 25 G, or SUP 16 Annex 18B G in the case of the RMAR.
Note 2	Firms that are members of a UK consolidation group are also required to submit this report on a UK consolidation group basis.
Note 3	This applies to a firm that is required to submit data item FSA003 and, at any tine within the 12 months up to its latest accounting reference date ("the relevant period"), was reporting data item FSA004 ("Firm A") or not reporting this item ("Firm B"). In the case of Firm A it must report this data item if one or both of its last two submissions in the relevant period show that the threshold was exceeded. In the case of Firm B it must report this item if both the last two submissions in the relevant period show that the threshold has been exceeded. The threshold is exceeded where data element 77A in data item FSA003 is greater than £10 million, or its currency equivalent, at the relevant reporting date for the firm.
Note 4	This applies to a firm that is required to submit data item FSA003 and, at any time within the 12 months up to its latest accounting reference date ("the relevant period"), was reporting data item FSA005 ("Firm A") or not reporting this item ("Firm B"). In the case of Firm A it must report this data item if one or both of its last two submissions in the relevant period show that the threshold was exceeded. In the case of Firm B it must report this item if both the last two submissions in the relevant period show that the threshold has been exceeded. The threshold is exceeded where data element 93A in data item FSA003 is greater than £50 million, or its currency equivalent, at the relevant reporting date for the firm.
Note 5	Only applicable to firms with a VaR model permission.
Note 6	This will not be applicable to BIPRU limited activity firms or BIPRU limited licence firms unless they have a waiver under BIPRU 6.1.2 G.
Note 7	This is only applicable to a firm that has adopted, in whole or in part, either the standardised approach, alternative standardised approach, or advanced measurement approach under BIPRU 6.
Note 8	Only applicable to BIPRU investment firms that: (a) are subject to consolidated supervision under BIPRU 8, except those that are either included within the consolidated supervision of a group that includes a UK credit institution, or that have been granted an investment firm consolidation waiver; or (b) have been granted an investment firm consolidation waiver; or (c) are not subject to consolidated supervision under BIPRU 8. A BIPRU investment firm under (a) must complete the report on the basis of its UK consolidation group. A BIPRU investment firm under (b) or (c) must complete the report on the basis of its solo position.
Note 9	This will be applicable to firms that are members of a UK consolidation group on the reporting date.
Note 10	Only applicable to a firm whose ultimate parent is a mixed-activity holding company.
Note 11	Only applicable to firms that have an IRB permission to use the IRB approach and BIPRU 4.
Note 12	Members of a UK integrated group should only submit this data item at the UK integrated group level.
Note 13	Only applicable to firms that have an IRB permission.
Note 14	Only applicable to firms that undertakesecuritisations.
Note 15	This item only applies to firms that are subject to an FSA requirement to hold professional indemnity insurance and are not exempt CAD firms.
13Note 16	A firm must complete this item separately on each of the following bases (if applicable). (1) It must complete it on a solo basis. Therefore even if it has a solo consolidation waiver it must complete the item on an unconsolidated basis by reference to the firm alone. (2) If it is a group liquidity reporting firm in a DLG by default and is a UK lead regulated firm, it must complete the item on the basis of that group. (3) If it is a group liquidity reporting firm in a UK DLG by modification, it must complete the item on the basis of that group. (4) If it is a group liquidity reporting firm in a non-UK DLG by modification, it must complete the item on the basis of that group.
13Note 17	A firm must complete this item separately on each of the following bases that are applicable. (1) It must complete it on a solo basis unless it is a group liquidity reporting firm in a UK DLG by modification. Therefore even if it has a solo consolidation waiver it must complete the item on an unconsolidated basis by reference to the firm alone. (2) If it is a group liquidity reporting firm in a UK DLG by modification, it must complete the item on the basis of that group.
13Note 18	If it is a non-ILAS BIPRU firm, it must complete it on a solo basis. Therefore even if it has a solo consolidation waiver it must complete the item on an unconsolidated basis by reference to the firm alone.
13Note 19	(1) This item must be reported in the reporting currency. (2) If any data element is in a currency or currencies other than the reporting currency, all currencies (including the reporting currency) must be combined into a figure in the reporting currency. (3) In addition, all material currencies (which may include the reporting currency) must each be recorded separately (translated into the reporting currency). However if: (a) the reporting frequency is (whether under a rule or under a waiver) quarterly or less than quarterly; or (b) the only material currency is the reporting currency; (3) does not apply. (4) If there are more than three material currencies for this data item, (3) only applies to the three largest in amount. A firm must identify the largest in amount in accordance with the following procedure. (a) For each currency, take the largest of the asset or liability figure as referred to in the definition of material currency. (b) Take the three largest figures from the resulting list of amounts. (5) The date as at which the calculations for the purposes of the definition of material currency are carried out is the last day of the reporting period in question. (6) The reporting currency for this data item is whichever of the following currencies the firm chooses, namely USD (the United States Dollar), EUR (the euro), GBP (sterling), JPY (the Japanese Yen), CHF (the Swiss Franc), CAD (the Canadian Dollar) or SEK (the Swedish Krona).
13Note 20	Note 19 applies, except that paragraph (3) does not apply, meaning that material currencies must not be recorded separately.
13Note 21	Any changes to reporting requirements caused by a firm receiving an intra-group liquidity modification (or a variation to one) do not take effect until the first day of the next reporting period applicable under the changed reporting requirements for the data item in question if the firm receives that intra-group liquidity modification or variation part of the way through such a period. If the change is that the firm does not have to report a particular data item or does not have to report it at a particular reporting level, the firm must nevertheless report that item or at that reporting level for any reporting period that has already begun. This paragraph is subject to anything that the intra-group liquidity modification says to the contrary.

SUP 16.12.28AR06/07/2009

2The applicable data items, reporting frequencies and submission deadlines referred to in SUP 16.12.4 R are set out in the table below. Reporting frequencies are calculated from a firm's accounting reference date, unless indicated otherwise. The due dates are the last day of the periods given in the table below following the relevant reporting frequency period.

Description of data item 11	Data item 11 (note 1)	Frequency		Submission deadline
		Annual regulated business revenue up to and including £5 million	Annual regulated business revenue over £5 million
Balance Sheet	Section A RMAR	Half yearly	Quarterly	30 business days
Income Statement	Section B RMAR	Half yearly	Quarterly	30 business days
Capital Adequacy	Section D1 RMAR	Half yearly	Quarterly	30 business days
Professional indemnity insurance (note 2)11	Section E RMAR	Half yearly	Quarterly 11 11	30 business days
Threshold Conditions	Section F RMAR	Half yearly	Half yearly	30 business days
Training and Competence	Section G RMAR	Half yearly	Half yearly	30 business days
COBS11 data	Section H RMAR	Half yearly	Half yearly	30 business days
Supplementary product sales data	Section I RMAR	Half yearly11 11	Annually	30 business days
Client money and client assets	Section C RMAR	Half yearly	Quarterly	30 business days
Fees and levies	Section J RMAR	Annually	Annually	30 business days
Note 1	When submitting the completed data item required, a firm must use the format of the data item set out in SUP 16 Annex 18A. Guidance notes for the completion of the data items is set out in SUP 16 Annex 18B.
11Note 2	This item only applies to firms that may be subject to an FSA requirement to hold professional indemnity insurance and are not exempt CAD firms.

SUP 13A.9.5G01/11/2007

(1) The purpose of the precautionary measure rule is to ensure that an incoming EEA firm is subject to the standards of MiFID and the MiFID implementing Directive to the extent that the Home State has not transposed MiFID or the MiFID implementing Directive by 1 November 2007. It is to 'fill a gap'.(2) The rule is made in the light of the duty of the United Kingdom under Article 62 of MiFID to adopt precautionary measures to protect investors. (3) The rule will be effective for

MIPRU 4.1.15G01/01/2007

Capital has an important role to play in protecting consumers and complements the roles played by professional indemnity insurance and client money protection (see the client money rules). Capital provides a form of protection for situations not covered by a firm's professional indemnity insurance and it provides the funds for the firm's PII excess, which it has to pay out of its own finances (see MIPRU 3.2.11 R and MIPRU 3.2.12 R for the relationship between the firm's capital

MIPRU 4.3.1R01/01/2007

This section contains provisions relating to the calculation of annual income for the purposes of: (1) the limits of indemnity for professional indemnity insurance; and(2) the capital resources requirements.

BIPRU 2.2.64G01/01/2007

In relation to the issues identified in BIPRU 2.2.63 G, an asset manager should consider, for example:(1) the direct cost to it resulting from fraud or theft;(2) the direct cost arising from customers' claims and legal action in the future; an asset manager could consider the impact on its financial position if a legal precedent were to encourage its customers to take legal action against that firm for failing to advise correctly on a certain type of product; the relevance of

PERG 8.14.40CG01/10/2005

1An advice centre is defined in article 73 as a body which:(1) gives advice which is free and in respect of which it does not receive any fee, commission or other reward;(2) provides debt advice as its principal financial services activity; and(3) in the case of a body which is not part of a local authority, holds adequate professional indemnity insurance or a guarantee providing comparable cover.This exemption should be of particular use to bodies such as Citizens Advice Bur

COBS 20.2.46G01/11/2007

A firm may include, within the policyholder advocate's terms of appointment, arrangements for the policyholder advocate to be indemnified in respect of certain claims that may be made against him in connection with the performance of his functions. If such indemnity is included, it should not include protection against any liability arising from acts of bad faith.

Related provisions for MIPRU 3.2.11

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