Glossary

PRA Rulebook Glossary

Printed on: 06/07/2024

Rulebook at: 01/01/2016

Term

Definition

Letter: A

approved bank

(except in COLL) (in relation to a bank account opened by a firm):

(a) if the account is opened at a branch in the United Kingdom:

(i) the Bank of England; or

(ii) the central bank of a member state of the OECD; or

(iii) a bank; or

(iv) a building society; or

(v) a bank which is supervised by the central bank or other banking regulator of a member state of the OECD; or

(b) if the account is opened elsewhere:

(i) a bank in (a); or

(ii) a credit institution established in an EEA State other than the United Kingdom and duly authorised by the relevant Home State regulator; or

(iii) a bank which is regulated in the Isle of Man or the Channel Islands; or

(d) any other bank that:

(i) is subject to regulation by a national banking regulator;

(ii) is required to provide audited accounts;

(iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time) and has a surplus revenue over expenditure for the last two financial years; and

(iv) has an annual audit report which is not materially qualified.

(in COLL) any person falling within (a-c).

01/04/2009

approved collateral

any form of security for the discharge of any liability arising from a contingent liability investment (other than a guarantee) which:

(a) (in relation to an on-exchange transaction) is acceptable under the rules of the relevant exchange or clearing house; and

(b) (in relation to an OTC transaction) would be acceptable for a similar transaction to the relevant exchange or clearing house.

01/12/2004

approved counterparty

means any of the following:

(1) an approved credit institution;

(2) a firm whose permission including dealing in investments as principal with respect to derivatives which are not listed;

(3) a MiFID investment firm whose authorise (as referred to in article 5 of MiFID) authorises it to carry on activities of the kind referred to in (2); or

(4) in respect of a transaction involving a new issue of securities which are to be listed, the issuer or a MiFID investment firm acting on behalf of the issuer.

01/01/2016

approved credit institution

(A) In the PRA Handbook:a credit institution recognised or permitted under the law of an EEA State to carry on any of the activities set out in Annex 1 to the CRD.

(B) In the FCA Handbook:a credit institution recognised or permitted under the law of an EEA State to carry on any of the activities set out in Annex 1 to the CRD.

01/01/2014

approved credit institution

means a credit institution recognised or permitted under the law of an EEA State to carry on any of the activities set out in Annex 1 to the CRD.

01/01/2016

approved depositary

any depositary:

(a) which is subject to regulation by a national regulatory body in connection with its custody services;

(b) which is required to prepare audited accounts;

(d) which

(i) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time) and has surplus revenue over expenditure for the last two financial years; or

(ii) if not, nevertheless has adequate financial resources for its business.

01/12/2004

approved derivative

(1) (in COLL) a derivative which is traded or dealt in on an eligible derivatives market.

(2) (in INSPRU ) a derivative in respect of which the conditions in INSPRU 3.2.5 R are met.

01/04/2009

approved financial institution

any of the following:

(a) the European Central Bank;

(b) the central bank of an EEA State;

(d) the European Bank for Reconstruction and Development;

(e) the International Finance Corporation;

(f) the International Monetary Fund;

(g) the Inter-American Development Bank;

(h) the African Development Bank;

(i) the Asian Development Bank;

(j) the Caribbean Development Bank;

(k) the European Investment Bank;

(l) the EU ; and

(m) the European Atomic Energy Community.

01/12/2009

approved financial institution

means any of the following:

(1) the European Central Bank;

(2) the central bank of an EEA State;

(3) the International Bank for Reconstruction and Development;

(4) the European Bank for Reconstruction and Development;

(5) the International Finance Corporation;

(6) the International Monetary Fund;

(7) the Inter-American Development Bank;

(8) the African Development Bank;

(9) the Asian Development Bank;

(10) the Caribbean Development Bank;

(11) the European Investment Bank;

(12) the EU; and

(13) the European Atomic Energy Community.

01/01/2016

approved index

in relation to permitted links:

(a) an index that is:

(i) calculated independently;

(ii) published at least once every week;

(iii) based on constituents that are permitted links; and

(iv) calculated on a basis that is made available to the public, and that includes both the rules for including and excluding constituents and the rules for valuation which must use an arithmetic average of the value of the constituents; or

(aa) relevant indices meeting the requirements of COLL 5.2.33 R; or

(b) a national index of retail prices published by or under the authority of a government, or by a body recognised under the national legislation, of a Zone A country; or

(i) based on constituents that are permitted links; and

(ii) in respect of which a derivative contract is listed; or

(d) the average earnings index when used for the purposes of orders made under section 148 of the Social Security Administration Act 1992 by the Department for Work and Pensions.

01/01/2016

approved person

a person in relation to whom the FCA or the PRA has given its approval under section 59 of the Act (Approval for particular arrangements) for the performance of a controlled function.

01/04/2013

approved quasi-derivative

a quasi-derivative in respect of which the conditions in INSPRU 3.2.5 R are met.

31/12/2006

approved quasi-derivative

means a quasi-derivative in respect of which the conditions in Insurance Company – Risk Management 6.2 are met.

01/01/2016

approved reinsurance to close

(a) a reinsurance to close effected before 1 January 2005; or

(b) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with the members of that syndicate in a later syndicate year or the members of one other syndicate ("the reinsuring members") that the reinsuring members will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year that is:

(i) effected after 1 January 2005; and

(ii) not a balance transfer between two syndicate years where the syndicate has only one member and the member is the same in each of those years; or

(c) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with a subsidiary of the Society that that subsidiary will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year ("the reinsured liabilities") and where:

(i) that subsidiary is wholly owned by the Society and if from time to time the subsidiary has an asset or cash flow deficiency such that the subsidiary is unable to meet any of the liabilities which it has reinsured, the Society is legally obliged to pay to the subsidiary a sum equal to that deficiency; and

(ii) at the effective date of the agreement, the relevant syndicate year has been open for at least two years after the date at which it would normally have been closed in accordance with the policies and practices in relation to the syndicate concerned.

31/12/2009

approved reinsurance to close

means;

(1) a reinsurance to close effected before 1 January 2005; or

(2) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with the members of that syndicate in a later syndicate year or the members of one other syndicate ("the reinsuring members") that the reinsuring members will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year that is:

(a) effected after 1 January 2005; and

(b) not a balance transfer between two syndicate years where the syndicate has only one member and the member is the same in each of those years; or

(3) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with a subsidiary of the Society that that subsidiary will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year ("the reinsured liabilities") and where:

(a) that subsidiary is wholly owned by the Society and if from time to time the subsidiary has an asset or cash flow deficiency such that the subsidiary is unable to meet any of the liabilities which it has reinsured, the Society is legally obliged to pay to the subsidiary a sum equal to that deficiency; and

(b) at the effective date of the agreement, the relevant syndicate year has been open for at least two years after the date at which it would normally have been closed in accordance with the policies and practices in relation to the syndicate concerned.

01/01/2016

approved security

(1) (in COLL) a transferable security that is admitted to official listing in an EEA State or is traded on or under the rules of an eligible securities market (otherwise than by the specific permission of the market authority).

(2) (in INSPRU ) any of the following:

(a) any security issued or guaranteed by, or the repayment of the principal of which, or the interest on which, is guaranteed by, and any loans to or deposits with, any government, public or local authority or nationalised industry or undertaking, which belongs to a Zone A country;

(b) any loan to, or deposit with, an approved financial institution;

(c) any debenture issued before 31 December 1994 by the Agricultural Mortgage Corporation Limited or the Scottish Agricultural Securities Corporation Limited.

(3) (in COBS ) any of the following:

(a) any security issued or guaranteed by, or the repayment of the principal of which, or the interest on which is guaranteed by, and any loan to or deposit with, any government, public or local authority or nationalised industry or undertaking that belongs to Zone A as defined in the Banking Consolidation Directive; or

(b) any loan to, or deposit with, an approved financial institution; or

(c) debentures issued before 31 December 1994 by the Agricultural Mortgage Corporation Ltd or the Scottish Agricultural Securities Corporation Ltd.

01/04/2009

approved security

means any of the following:

(1) any security issued or guaranteed by, or the repayment of the principal of which, or the interest of which, is guaranteed by, and any loans to or deposits with, any government, public or local authority or national industry or undertaking, which belongs to an approved State;

(2) any loan to, or deposit with, an approved financial institution; and

(3) any debenture issued before 31 December 1994 by the Agricultural Mortgage Corporation Limited on the Scottish Agricultural Securities Corporation Limited.

01/01/2016

approved State

means any of the following:

(1) an EEA state;

(2) the United States of America;

(3) Canada;

(4) Japan; or

(5) Australia,

other than when that country has rescheduled its external debt.

01/01/2016

authorised electronic money institution

(in accordance with regulation 2(1) of the Electronic Money Regulations):

(a) a person included by the FCA in the Financial Services Register as an authorised electronic money institution pursuant to regulation 4(1)(a) of the Electronic Money Regulations; or

(b) a person deemed to have been granted authorisation by virtue of regulation 74 of the Electronic Money Regulations.

01/04/2013

authorised payment institution

(in accordance with regulation 2(1) of the Payment Services Regulations) a person included by the FCA in the Financial Services Register as an authorised payment institution pursuant to regulation 4(1)(a), or a person deemed to have been granted authorisation by virtue of regulation 121 of the Payment Services Regulations.

01/04/2013