Prudential Regulation Authority Rulebook

accounting principles

means in the case of:

1. a firm which is a company, the applicable accounting requirements for the company concerned specified in Part 15 of the Companies Act 2006 or in any provision made under that Act;
2. an overseas firm, the accounting requirements as would be applicable if that firm was a company with its registered or head office in the UK; or
3. any other firm, the applicable accounting requirements for the type of firm concerned as specified in any relevant legislation;

and for this purpose ‘accounting requirements’ means accounting requirements for the purposes of external financial reporting and ‘company’ has the same meaning as in section 1(1) of the Companies Act 2006.

accounting reference date

(1) in relation to a company incorporated in the UK under the Companies Acts, means the accounting reference date of that company determined in accordance with section 391 of the Companies Act 2006; and
(2) in relation to any other body, means the last day of its financial year.

accumulating with-profits policies

means a with-profits policy which has a readily identifiable current benefit, whether or not this benefit is currently realisable, which is adjusted by an amount explicitly related to the amount of any premium payment and to which additional benefits are added in respect of participation in profits by additions directly related to the current benefit, or a policy with similar characteristics.

actuarial health insurance

means health insurance which meets all the conditions set out in Insurance Company – Capital Resources Requirements 13.1.

actuarial investigation

means an investigation to which Insurance Company – Reporting 5.8 – 5.12 applies.

admission to trading

means the process by which the exchange permits members of the exchange to enter into transactions in that investment under and subject to the rules of the exchange.

advising on investments

means the regulated activity, specified in article 53 of the Regulated Activities Order (Advising on investments).

advising on pension transfers and pension opt-outs

means advising on investments in respect of pension transfers and pension opt-outs.

agreeing to carry on a regulated activity

means the regulated activity, specified in article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity).

AIFM investment management functions

means investment management functions of an AIFM as set out in 1(a) (portfolio management) or (b) (risk management) of Annex I to AIFMD.

analogous non-reinsurance financing agreement

means analogous non-reinsurance financing agreements, including contingent loans, securitisations and any other arrangements in respect of contracts of insurance that are analogous to contracts of reinsurance in terms of the risks transferred and the finance provided.

ancillary services undertaking

means an undertaking, the principal activity of which consists of owning or managing property, managing data-processing services, or a similar activity which is ancillary to the principal activity of one or more credit institutions, investment firms or insurers.

approved credit institution

The changes to this defined term are effective from 23:00 on 31/12/2020.

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

approved financial institution

The changes to this defined term are effective from 23:00 on 31/12/2020.

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;

(13) the European Atomic Energy Community; and

(14) the Bank of England.

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.

approved stock lending transaction

means a stock lending transaction in respect of which the conditions in Insurance Company – Risk Management 8.2 have been met.

arranging (bringing about) deals in investments

means the regulated activity specified in article 25(1) of the Regulated Activities Order.

arranging safeguarding and administration of assets

that part of safeguarding and administering investments which consists solely of arranging for one or more other persons to carry on both:

(a) the safeguarding of assets belonging to another; and

(b) the administration of those assets.

Article 109 undertaking

means a UK bank, a building society, a UK designated investment firm, a PRA approved parent holding company, a PRA designated parent holding company, a PRA approved intermediate holding company, a PRA designated intermediate holding company, or a PRA designated institution.

authorised electronic money institution

has the meaning given in regulation 2(1) of the Electronic Money Regulations.