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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

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Article 15b Synthetic holdings for the purposes of Article 36(1)(f),(h) and (i) of Regulation (EU) No 575/2013

  1. (1)

    The following financial products shall be considered synthetic holdings of capital instruments pursuant to points (f), (h) and (i) of Article 36(1) of Regulation (EU) No 575/2013:

    1. (a)

      derivative instruments that have capital instruments of a financial sector entity as their underlying or have the financial sector entity as their reference entity;

    2. (b)

      guarantees or credit protection provided to a third party in respect of the third party's investments in a capital instrument of a financial sector entity.

  2. (2)

    The financial products provided for in paragraph 1 shall include the following:

    1. (a)

      investments in total return swaps on a capital instrument of a financial sector entity;

    2. (b)

      call options purchased by the institution on a capital instrument of a financial sector entity;

    3. (c)

      put options sold by the institution on a capital instrument of a financial sector entity or any other actual or contingent contractual obligation of the institution to purchase its own own funds instruments;

    4. (d)

      investments in forward purchase agreements on a capital instrument of a financial sector entity.