|
| |
|
“deposit” has the meaning given by article 5(2) of the Financial Services |
| |
and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/ |
| |
544) but ignoring the exclusions in articles 6 to 9AB; |
| |
“exempt activities” means— |
| |
(a) | insurance activities, asset management activities and related |
| 5 |
| |
(b) | non-financial trading activities; |
| |
“financial trading entity” means an entity which— |
| |
(a) | is an authorised person for the purposes of FISMA 2000 (see |
| |
| 10 |
(b) | is not UK resident, but if it were and it carried out its activities |
| |
in the United Kingdom, would be required to be an |
| |
| |
(c) | is not within paragraph (a) or (b) but carries on a trade |
| |
consisting wholly or partly in dealing in securities; |
| 15 |
“insurance activities” means— |
| |
(a) | the effecting or carrying out of contracts of insurance by a |
| |
| |
(b) | investment business that arises directly from activities falling |
| |
| 20 |
“lending activities” means— |
| |
(a) | acceptance of deposits or other repayable funds, |
| |
(b) | lending of money, including consumer credit, mortgage |
| |
credit, factoring (with or without recourse) and financing of |
| |
commercial transactions (including forfeiting), |
| 25 |
(c) | finance leasing (as lessor), |
| |
(d) | issuing and administering means of payment, |
| |
(e) | provision of guarantees or commitments to provide money, |
| |
(f) | money transmission services, |
| |
(g) | provision of alternative finance arrangements, and |
| 30 |
(h) | other activities carried on in connection with activities falling |
| |
within any of paragraphs (a) to (g); |
| |
“net-basis activities” means activities normally reported on a net basis |
| |
in consolidated financial statements prepared under the applicable |
| |
| 35 |
“non-financial trading activities” means activities carried on by an |
| |
entity which is not a financial trading entity, other than— |
| |
(a) | lending activities, and |
| |
(b) | dealing on own account, with the exception of any hedging |
| |
transactions in relation to activities which (disregarding this |
| 40 |
exception) are non-financial trading activities; |
| |
“regulated insurer”, in relation to the relevant group, means a member |
| |
| |
(a) | is authorised under the law of any territory to carry on |
| |
| 45 |
(b) | is a member of a body or organisation which is so authorised; |
| |
“related activities” means— |
| |
(a) | activities which are ancillary to insurance activities or asset |
| |
management activities of any entity which is a member of the |
| |
|
| |
|
| |
|
relevant group (whether or not the entity carrying on the |
| |
insurance activities or asset management activities), and |
| |
(b) | activities which would not be carried on but for such |
| |
insurance activities or asset management activities being |
| |
| 5 |
but does not include dealing on own account; |
| |
| |
| |
(b) | rights of unit holders in unit trust schemes to which TCGA |
| |
1992 applies as a result of section 99 of that Act, and |
| 10 |
(c) | in the case of a company with no share capital, interests in the |
| |
company possessed by members of the company. |
| |
| |
Chargeable equity and liabilities |
| |
Definition of “assets”, “equity” and “liabilities” |
| 15 |
14 (1) | For the purposes of this Schedule, “assets”, “equity” and “liabilities” have |
| |
the same meanings as they have for the purposes of international accounting |
| |
| |
(2) | Sub-paragraph (1) is without prejudice to any provision of this Schedule |
| |
which requires anything to be determined by reference to amounts which |
| 20 |
are recognised, or amounts which would have been recognised, in |
| |
consolidated financial statements or financial statements prepared under |
| |
| |
Chargeable equity and liabilities of a UK banking group or a building society group |
| |
15 (1) | This paragraph applies if the relevant group is a UK banking group or a |
| 25 |
| |
(2) | To determine the amount of the relevant group’s chargeable equity and |
| |
| |
(a) | determine the amount of the group’s equity and liabilities (other |
| |
than excluded equity and liabilities) as at the end of the chargeable |
| 30 |
| |
(b) | adjust that amount in accordance with paragraphs 16 and 43 (so far |
| |
| |
(c) | finally, reduce that amount (but not below nil) by— |
| |
(i) | the amount of the group’s high quality liquid assets as at the |
| 35 |
end of that period, other than any asset which for the |
| |
purposes of an adjustment under paragraph (b) is an asset to |
| |
which paragraph 16(3) applies, and |
| |
(ii) | where sub-paragraph (4) applies, the amount determined |
| |
under that sub-paragraph. |
| 40 |
(3) | Sub-paragraph (4) applies where— |
| |
(a) | as at the end of the chargeable period, the assets of the group include |
| |
a financial asset in respect of an advance of cash made by a member |
| |
| |
|
| |
|
| |
|
(b) | that financial asset is not an asset which, for the purposes of an |
| |
adjustment under sub-paragraph (2)(b), is an asset to which |
| |
paragraph 16(3) applies, and |
| |
(c) | underlying that asset, as collateral, is an item (“the collateral”) owned |
| |
by that member which would form part of the group’s high quality |
| 5 |
liquid assets as at the end of that period were the collateral, rather |
| |
than the financial asset, an asset of the group. |
| |
(4) | The amount within sub-paragraph (2)(c)(ii) is— |
| |
(a) | the amount of the financial asset as at the end of that period or, if |
| |
lower, an amount equal to the fair value of the collateral as at that |
| 10 |
| |
(b) | if this sub-paragraph applies in relation to more than one financial |
| |
asset, the total of the amounts determined under paragraph (a) in |
| |
respect of each of those assets. |
| |
(5) | For the purposes of this paragraph and paragraph 16 the relevant group’s |
| 15 |
assets, equity and liabilities are to be determined by reference to— |
| |
(a) | the amounts recognised in the group’s consolidated financial |
| |
statements for the chargeable period as prepared under international |
| |
accounting standards or UK GAAP, or |
| |
(b) | if no such financial statements are prepared, the amounts which |
| 20 |
would have been so recognised had consolidated financial |
| |
statements for the group been prepared for the chargeable period |
| |
under international accounting standards. |
| |
(6) | In reducing the amount of any equity or liabilities under sub-paragraph |
| |
(2)(c), long term equity and liabilities are to be reduced before short term |
| 25 |
| |
16 (1) | This paragraph applies for the purposes of paragraph 15(2) if— |
| |
(a) | a member (“M”) of the relevant group has liabilities to an entity (“N”) |
| |
which is not a member of the group and N has assets which |
| |
correspond to those liabilities, |
| 30 |
(b) | M also has assets which correspond to liabilities which N has to M, |
| |
(c) | there is in place an agreement between M and N which makes |
| |
provision for there to be a single net settlement of all M’s liabilities |
| |
to N (so far as covered by the provision) and all N’s liabilities to M |
| |
(so far as covered by the provision) if the netting event occurs, and |
| 35 |
(d) | the provision mentioned in paragraph (c) is legally effective and |
| |
| |
(2) | For the purposes of sub-paragraph (1)— |
| |
(a) | “agreement” includes an agreement which forms part of a multi- |
| |
lateral agreement, arrangement or trading facility, |
| 40 |
(b) | references to assets of one party which correspond to liabilities of |
| |
another party are to amounts receivable by that first party which |
| |
correspond to amounts due from that other party, and |
| |
(c) | “the netting event occurs” if the insolvency or bankruptcy of M or N |
| |
gives rise to the termination of any arrangements under which any |
| 45 |
liability covered by the provision mentioned in sub-paragraph (1)(c) |
| |
| |
(3) | The amount of M’s net settlement liabilities is to be reduced (but not below |
| |
nil) by the amount of M’s net settlement assets. |
| |
|
| |
|
| |
|
(4) | “M’s net settlement liabilities” means M’s liabilities to N so far as they— |
| |
(a) | are covered by the provision mentioned in sub-paragraph (1)(c), and |
| |
(b) | are not excluded liabilities. |
| |
(5) | “M’s net settlement assets” means M’s assets so far as corresponding to N’s |
| |
net settlement liabilities. |
| 5 |
(6) | “N’s net settlement liabilities” means N’s liabilities to M so far as they are |
| |
covered by the provision mentioned in sub-paragraph (1)(c). |
| |
(7) | If M’s net settlement liabilities exceed M’s net settlement assets, and a |
| |
proportion (A%) of those liabilities is long term liabilities and a proportion |
| |
(B%) of those liabilities is short term liabilities, under sub-paragraph (3)— |
| 10 |
(a) | the long term liabilities are reduced by A% of M’s net settlement |
| |
| |
(b) | the short term liabilities are reduced by B% of those assets. |
| |
Chargeable equity and liabilities of a foreign banking group |
| |
17 (1) | This paragraph applies if the relevant group is a foreign banking group. |
| 15 |
(2) | The amount of the chargeable equity and liabilities of the relevant group is |
| |
the sum of all type A, type B, type C and type D equity and liabilities. |
| |
(3) | Type A equity and liabilities are the chargeable equity and liabilities of any |
| |
| |
(4) | “UK sub-group” means a group of entities— |
| 20 |
(a) | which is a group for the purposes of those provisions of international |
| |
accounting standards or UK GAAP which relate to the preparation |
| |
of consolidated financial statements, |
| |
(b) | which has as its parent or parent undertaking for the purposes of |
| |
those provisions an entity which is a UK resident entity, and |
| 25 |
(c) | the members of which for the purposes of those provisions are all |
| |
members of the relevant group. |
| |
(5) | A UK sub-group is “relevant” if— |
| |
(a) | consolidated financial statements for the chargeable period are |
| |
prepared for it under international accounting standards or UK |
| 30 |
| |
(b) | its members are not members of any larger UK sub-group for which |
| |
such financial statements are prepared. |
| |
(6) | To determine the amount of the chargeable equity and liabilities of a |
| |
| 35 |
(a) | determine the amount of the sub-group’s equity and liabilities (other |
| |
than excluded equity and liabilities) as at the end of the chargeable |
| |
| |
(b) | adjust that amount in accordance with paragraphs 18 and 43 (so far |
| |
| 40 |
(c) | finally, reduce that amount (but not below nil) by— |
| |
(i) | the amount of the sub-group’s high quality liquid assets as at |
| |
the end of that period, other than any asset which for the |
| |
purposes of an adjustment under paragraph (b) is an asset to |
| |
which paragraph 18(11) applies, and |
| 45 |
|
| |
|
| |
|
(ii) | where sub-paragraph (8) applies, the amount determined |
| |
under that sub-paragraph. |
| |
(7) | Sub-paragraph (8) applies where— |
| |
(a) | as at the end of the chargeable period, the assets of the relevant UK |
| |
sub-group include a financial asset in respect of an advance of cash |
| 5 |
made by a member of that sub-group, |
| |
(b) | that financial asset is not an asset which, for the purposes of an |
| |
adjustment under sub-paragraph (6)(b), is an asset to which |
| |
paragraph 18(11) applies, and |
| |
(c) | underlying that asset, as collateral, is an item (“the collateral”) owned |
| 10 |
by that member which would form part of the sub-group’s high |
| |
quality liquid assets as at the end of that period were the collateral, |
| |
rather than the financial asset, an asset of the sub-group. |
| |
(8) | The amount within sub-paragraph (6)(c)(ii) is— |
| |
(a) | the amount of the financial asset as at the end of that period or, if |
| 15 |
lower, an amount equal to the fair value of the collateral as at that |
| |
| |
(b) | if this sub-paragraph applies in relation to more than one financial |
| |
asset, the total of the amounts determined under paragraph (a) in |
| |
respect of each of those assets. |
| 20 |
(9) | For the purposes of this paragraph and paragraph 18, the assets, equity and |
| |
liabilities of a relevant UK sub-group are to be determined by reference to |
| |
the amounts recognised in its consolidated financial statements for the |
| |
| |
(10) | Type B equity and liabilities are the chargeable equity and liabilities of any |
| 25 |
UK resident entity which— |
| |
(a) | is a member of the relevant group, but |
| |
(b) | is not a member of a relevant UK sub-group. |
| |
(11) | Type C equity and liabilities are the chargeable equity and liabilities of any |
| |
non-UK resident entity which— |
| 30 |
(a) | is a member of the relevant group, and |
| |
(b) | is a member of a UK sub-group but is not a member of a relevant UK |
| |
| |
(12) | To determine the amount of the chargeable equity and liabilities of an entity |
| |
covered by sub-paragraph (10) or (11)— |
| 35 |
(a) | determine the amount of the entity’s equity and liabilities (other than |
| |
excluded equity and liabilities) as at the end of the chargeable period, |
| |
(b) | adjust that amount in accordance with paragraphs 18 and 43 (so far |
| |
| |
(c) | finally, reduce that amount (but not below nil) by— |
| 40 |
(i) | the amount of the entity’s high quality liquid assets as at the |
| |
end of that period, other than any asset which for the |
| |
purposes of an adjustment under paragraph (b) is an asset to |
| |
which paragraph 18(11) applies, and |
| |
(ii) | where sub-paragraph (14) applies, the amount determined |
| 45 |
under that sub-paragraph. |
| |
(13) | Sub-paragraph (14) applies where— |
| |
|
| |
|
| |
|
(a) | as at the end of the chargeable period, the assets of the entity include |
| |
a financial asset in respect of an advance of cash made by the entity, |
| |
(b) | that financial asset is not an asset which, for the purposes of an |
| |
adjustment under sub-paragraph (12)(b), is an asset to which |
| |
paragraph 18(11) applies, and |
| 5 |
(c) | underlying that asset, as collateral, is an item (“the collateral”) owned |
| |
by that entity which would form part of the entity’s high quality |
| |
liquid assets as at the end of that period were the collateral, rather |
| |
than the financial asset, an asset of the entity. |
| |
(14) | The amount within sub-paragraph (12)(c)(ii) is— |
| 10 |
(a) | the amount of the financial asset as at the end of the chargeable |
| |
period or, if lower, an amount equal to the fair value of the collateral |
| |
| |
(b) | if this sub-paragraph applies in relation to more than one financial |
| |
asset, the total of the amounts determined under paragraph (a) in |
| 15 |
respect of each of those assets. |
| |
(15) | For the purposes of this paragraph and paragraph 18 the assets, equity and |
| |
liabilities of an entity covered by sub-paragraph (10) or (11) are to be |
| |
determined by reference to— |
| |
(a) | the amounts recognised in the entity’s financial statements for the |
| 20 |
chargeable period as prepared under international accounting |
| |
| |
(b) | if no such financial statements are prepared, the amounts which |
| |
would have been so recognised had such financial statements been |
| |
| 25 |
(i) | under international accounting standards, or |
| |
(ii) | under UK GAAP if that is what the entity prepares its |
| |
financial statements under. |
| |
(16) | In reducing the amount of any equity or liabilities under sub-paragraph |
| |
(6)(c) or (12)(c), long term equity and liabilities are to be reduced before short |
| 30 |
| |
(17) | Type D equity and liabilities are the UK allocated equity and liabilities (see |
| |
paragraph 24) as at the end of the chargeable period of any relevant foreign |
| |
| |
(a) | is a member of the relevant group, but |
| 35 |
(b) | is not a member of a UK sub-group. |
| |
| |
(a) | the amount of the equity and liabilities, as at the end of the |
| |
chargeable period, of a relevant UK sub-group or an entity covered |
| |
by sub-paragraph (10) or (11), or |
| 40 |
(b) | the amount of the UK allocated equity and liabilities, as at the end of |
| |
that period, of a relevant foreign bank covered by sub-paragraph |
| |
| |
| is less than £50,000,000, the equity and liabilities, or UK allocated equity and |
| |
liabilities, may be ignored for the purposes of this paragraph and paragraph |
| 45 |
| |
(19) | But, the total amount of equity and liabilities which may be ignored under |
| |
sub-paragraph (18) may not exceed £200,000,000. |
| |
|
| |
|
| |
|
18 (1) | This paragraph applies for the purposes of paragraph 17(6) and (12). |
| |
(2) | In this paragraph “relevant member” means— |
| |
(a) | a relevant UK sub-group, |
| |
(b) | a UK resident entity covered by paragraph 17(10), or |
| |
(c) | a non-UK resident entity covered by paragraph 17(11). |
| 5 |
(3) | Sub-paragraph (4) applies if the members of a relevant UK sub-group are |
| |
also members of one or more larger UK sub-groups. |
| |
(4) | Any equity of the relevant UK sub-group is to be left out so far as it would |
| |
have been eliminated under normal consolidation procedures had |
| |
consolidated financial statements for the chargeable period been prepared |
| 10 |
for the larger or largest UK sub-group— |
| |
(a) | under international accounting standards, or |
| |
(b) | under UK GAAP if the entity which is the parent or parent |
| |
undertaking for the larger or largest UK sub-group prepares its |
| |
financial statements under UK GAAP. |
| 15 |
(5) | Sub-paragraph (6) applies if a relevant member within sub-paragraph (2)(b) |
| |
or (c) is a member of one or more UK sub-groups. |
| |
(6) | Any equity of the relevant member is to be left out so far as it would have |
| |
been eliminated under normal consolidation procedures had consolidated |
| |
financial statements for the chargeable period been prepared for the UK sub- |
| 20 |
group or the largest UK sub-group— |
| |
(a) | under international accounting standards, or |
| |
(b) | under UK GAAP if the entity which is the parent or parent |
| |
undertaking for the UK sub-group or the largest UK sub-group |
| |
prepares its financial statements under UK GAAP. |
| 25 |
(7) | The following liabilities of a relevant member are to be left out— |
| |
(a) | liabilities to other relevant members, and |
| |
(b) | liabilities to a relevant foreign bank covered by paragraph 17(17) so |
| |
far as the bank’s assets corresponding to the liabilities are assets of |
| |
the permanent establishment through which the bank carries on a |
| 30 |
trade in the United Kingdom as determined at Step 2 in paragraph |
| |
| |
(8) | Sub-paragraph (11) applies if— |
| |
(a) | an entity (“M”) within sub-paragraph (9) has liabilities to another |
| |
entity (“N”) which is neither an entity within that sub-paragraph nor |
| 35 |
a relevant foreign bank covered by paragraph 17(17), and N has |
| |
assets which correspond to those liabilities, |
| |
(b) | M also has assets which correspond to liabilities which N has to M, |
| |
(c) | there is in place an agreement between M and N which makes |
| |
provision for there to be a single net settlement of all M’s liabilities |
| 40 |
to N (so far as covered by the provision) and all N’s liabilities to M |
| |
(so far as covered by the provision) if the netting event occurs, and |
| |
(d) | the provision mentioned in paragraph (c) is legally effective and |
| |
| |
(9) | An entity is within this sub-paragraph if it is— |
| 45 |
(a) | a member of a relevant UK sub-group, or |
| |
(b) | a relevant member within sub-paragraph (2)(b) or (c). |
| |
|
| |
|