Glossary
accepting deposits
means the regulated activity specified in article 5 of the Regulated Activities Order (Accepting deposits).
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.
actuarial body
means the Institute and Faculty of Actuaries.
actuary
means a fellow of an actuarial body or (in connection with general insurance business) a Fellow of the Casualty Actuarial Society who is a member of an actuarial body.
affiliated company
means (in relation to a person) an undertaking in the same group as that person.
ancillary activity
means an activity which is not a regulated activity but which is:
(1) carried on in connection with a regulated activity; or
(2) held out as being for the purposes of a regulated activity.
ancillary service
means any of the services listed in Section B of Annex 1 to MiFID.
appointed representative
has the meaning given in s39(2) FSMA.
approved person
means a person in relation to whom the FCA or the PRA has given its approval under section 59 of FSMA (Approval for particular arrangements) for the performance of a controlled function.
associate
means (in relation to a person ("A")):
(1) an affiliated company of A;
(2) an appointed representative of A, or a tied agent of A, or of any affiliated company of A; and
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(3) any other whose business or domestic relationship with A or A’s associate might reasonably be expected to give rise to a community of interest between them which may involve a conflict of interest in dealings with third parties.
bank
means:
(1) a firm with a Part 4A Permission to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or
a building society; or
(2) an EEA bank.
branch
means
(1) (in relation to a credit institution):
(a) a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions;
(b) for the purposes of the CRD and in accordance with Article 38 of the CRD, any number of places of business set up in the same EEA State by a credit institution with headquarters in another EEA State are to be regarded as a single branch; or
(2) (in relation to an investment firm) has the meaning given in Article 4(1)(26) of MiFID.
body corporate
means any body corporate including a body corporate constituted under the law of a country or territory outside the UK.
BRRD
means Directive 2014/59/EU of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU , and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council.
BRRD undertaking
means a CRR firm or a qualifying parent undertaking of a CRR firm.
building society
has the meaning given in section 119 of the Building Societies Act 1986.
business day
means:
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(1) (in relation to anything done or to be done in (including to be submitted to a place in) any part of the UK) any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in that part of the UK;
(2) (in relation to anything done or to be done by reference to a market outside the UK) any day on which that market is normally open for business.
Capital Requirements Regulations
means the Capital Requirements Regulations 2013 (SI 2013/3115).
carrying out contracts of insurance
means the regulated activity specified in article 10(2) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
client
has the meaning given in the FCA Handbook other than for the purposes of the part of the FCA Handbook in Specialist sourcebooks that has the title Professional Firms.
Consolidated Life Directive
means the Council Directive of 5 November 2002 on the taking-up and pursuit of the business of life assurance (No 2002/83/EC), which consolidates the provisions of the First Life Directive, the Second Life Directive and the Third Life Directive.
contracts of general insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
contract of insurance
has the meaning given in Article 3(1) of the Regulated Activities Order.
contracts of long-term insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
controlled function
means a function, relating to the carrying on of a regulated activity by a firm, which is specified by either the FCA or the PRA, under section 59 of FSMA (Approval for particular arrangements).
Council
means the governing body of the Society constituted by section 3 of the Lloyd’s Act 1982.
credit institution
has the meaning given in point (1) of Article 4(1) of the CRR.
CRD
means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit
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institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
CRD credit institution
means a credit institution that has its registered office (or, if it has no registered office, its head office) in an EEA State, excluding an institution to which the CRD does not apply under Article 2 of the CRD.
credit union
has the meaning given in section 31 of the Credit Unions Act 1979.
CRR
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
CRR firm
means a UK bank, a building society or a UK designated investment firm.
cross border services
means:
(1) (in relation to a UK firm) services provided within an EEA State other than the UK under the freedom to provide services; and
(2) (in relation to an incoming EEA firm or an incoming Treaty firm) services provided within the UK under the freedom to provide services.
dealing in investments as principal
means the regulated activity specified in Article 14 of the Regulated Activities Order (Dealing in investments as principal).
designated investment firm
means an investment firm that has been designated by the PRA under Article 3 of Financial Services and Markets Act 2000 (PRA-regulated Activities) Order (S.I. 2013/556).
director
means (in relation to any of the following (whether constituted in the UK or under the law of a country or territory outside it)):
(a) an unincorporated association;
(b) a body corporate;
any person appointed to direct its affairs, including a person who is a member of its governing body and (in accordance with section 417(1) of FSMA):
(i) a person occupying in relation to it the position of a director (by whatever name called); and
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(ii) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that body are accustomed to act.
EBA
means the European Banking Authority.
EEA
means the European Economic Area.
EEA bank
means an incoming EEA firm that is a CRD credit institution.
effecting contracts of insurance
means the regulated activity specified in article 10(1) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
employee
means an individual:
(1) who is employed or appointed by a person in connection with that person's business, whether under a contract of service or for services or otherwise; or
(2) whose services, under an arrangement between that person and a third party, are placed at the disposal and under the control of that person.
EU instrument
has the meaning given in Part II of Schedule 1 to the European Communities Act 1972.
European Economic Area
means the area established by the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as it has effect for the time being and which consists of the EEA States.
FCA Handbook
means the FCA’s Handbook of rules and guidance as amended from time to time.
financial instruments
mean the instruments specified in Section C of Annex I of MiFID.
firm
means a PRA-authorised person within the meaning of section 2B(5) of FSMA.
First Life Directive
means the Council Directive of 5 March 1979 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (No 79/267/EEC).
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First Non-Life Directive
the Council Directive of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life insurance (No 73/239/EEC).
FSMA
means the Financial Services and Markets Act 2000.
Fundamental Rules
means the rules set out in Fundamental Rules 2.
general insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of general insurance only.
governing body
means the board of directors, committee of management or other governing body of an unincorporated association or body corporate.
guidance
means guidance given by the PRA in the form of supervisory statements or otherwise.
home Member State
has the meaning given in Article 4(1)(43) of the CRR.
IMD insurance intermediary
has the meaning given in article 2(1) of the Insurance Mediation Directive.
incoming EEA firm
means an EEA firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 3 of FSMA.
incoming firm
means an incoming firm within the meaning of section 193 of FSMA.
incoming Treaty firm
means a Treaty firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 4 of FSMA.
insurance business
means the regulated activities of effecting contracts of insurance or carrying out contracts of insurance.
Insurance Directives
means the Consolidated Life Directive and the First Non-Life Directive, Second Non-Life Directive and Third Non-Life Directive.
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Insurance Groups Directive
means Directive of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group (1998/78/EC).
Insurance Mediation Directive
means the European Parliament and Council Directive of 9 December 2002 on insurance mediation (No 2002/92/EC).
insurance special purpose vehicle
means an undertaking, other than an insurance undertaking or reinsurance undertaking which has received an official authorisation in accordance with Article 6 of the First Non-Life Directive, Article 4 of the Consolidated Life Directive or Article 3 of the Reinsurance Directive:
(1) which assumes risks from such insurance undertakings or reinsurance undertakings; and
(2) which fully funds its exposures to such risks through the proceeds of a debt issuance or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the undertaking's reinsurance obligations.
insurance undertaking
means an undertaking, whether or not an insurer, which carries on insurance business.
insurer
means a firm with permission to effect contracts of insurance or carry out contracts of insurance (other than a UK ISPV).
internal controls
means the whole system of controls, financial or otherwise, established by the management of a firm in order to:
(1) carry on the business of the firm in an orderly and efficient manner;
(2) ensure adherence to management policies;
(3) safeguard the assets of the firm and other assets for which the firm is responsible; and
(4) secure as far as possible the completeness and accuracy of the firm's records (including those necessary to ensure continuous compliance with the requirements or standards under the regulatory system relating to the adequacy of the firm's financial resources).
investment firm
means any person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.
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investment services and/or activities
means any of the services and activities listed in Section A of Annex I to MiFID.
long-term insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of long-term insurance only.
management body
means a firm’s body or bodies, which are appointed in accordance with national law, which are empowered to set the firm’s strategy, objectives and overall direction, and which oversee and monitor management decision-making, and include the persons who effectively direct the business of the firm.
managing agent
has the meaning given in article 3(1) of the Regulated Activities Order.
market risk
means the risk that arises from fluctuations in values of, or income from assets, or in interest or exchange rates.
material outsourcing
means outsourcing services of such importance that weakness, or failure, of the services would cast serious doubt upon the firm's continuing satisfaction of the threshold conditions or compliance with the Fundamental Rules.
member
means a person admitted to membership of the Society or any person by law entitled or bound to administer its affairs.
MiFID II
means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast).
MiFID
means the European Parliament and Council Directive on markets in financial instruments (No. 2004/39/EC).
MiFID business
means investment services and activities and, where relevant, ancillary services carried on by a MiFID investment firm.
MiFID implementing Directive
means Commission Directive No. 2006/73/EC implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.
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MiFID investment firm
means a firm to which MiFID applies.
MiFIR
means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.
mutual
means an insurer which:
(1) if it is a body corporate has no share capital (except a wholly owned subsidiary with no share capital but limited by guarantee); or
(2) is a friendly society; or
(3) is a society registered or deemed to be registered under Co-operative and Benefit Societies Act 2014 or the Industrial and Provident Societies (Northern Ireland) Act 1969.
non-directive firm
(in accordance with the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/774)) a UK domestic firm other than:
(1) a credit institution authorised under the Banking Consolidation Directive;
(2) an investment firm authorised under MiFID;
(3) a management company as defined in article 2(1)(b) of the European Parliament and Council Directive of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (No 2009/65/EC),1 2, 3, 4, as amended (the UCITS Directive), authorised under that directive;
(4) an undertaking pursuing the activity of direct insurance within the meaning of:
(a) article 2 of the Consolidated Life Directive, authorised under that directive; or
(b) article 1 of the First Non-Life Directive, authorised under that directive;
(5) an undertaking pursuing the activity of reinsurance within the meaning of article 2.1(a) of the Reinsurance Directive, authorised under that directive.
non-directive friendly society
means:
(1) a friendly society whose insurance business is restricted to the provision of benefits which vary according to the resources available and in which the contributions of the members are determined on a flat-rate basis;
(2) a friendly society whose long-term insurance business is restricted to the provision of benefits for employed and self-employed persons belonging to an
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undertaking or group of undertakings, or a trade or group of trades, in the event of death or survival or of discontinuance or curtailment of activity (whether or not the commitments arising from such operations are fully covered at all times by mathematical reserves);
(3) a friendly society which undertakes to provide benefits solely in the event of death where the amount of such benefits does not exceed the average funeral costs for a single death or where the benefits are provided in kind;
(4) a friendly society (carrying on long-term insurance business):
(a) whose registered rules contain provisions for calling up additional contributions from members or reducing their benefits or claiming assistance from other persons who have undertaken to provide it; and
(b) whose annual gross premium income (other than from contracts of reinsurance) has not exceeded 5 million Euro for each of the three preceding financial years;
(5) a friendly society (carrying on general insurance business):
(a) whose registered rules contain provisions for calling up additional contributions from members or reducing their benefits;
(b) whose gross premium income (other than from contracts of reinsurance) for the preceding financial year did not exceed 5 million Euro; and
(c) whose members provided at least half of that gross premium income;
(6)
(a) a friendly society whose liabilities in respect of general insurance contracts are fully reinsured with or guaranteed by other mutuals; and;
(b) the mutuals providing the reinsurance or the guarantee are subject to the rules of the First Non-Life Directive.
and
(7) in each case whose insurance business is limited to that described in any of (1) to (6); and
(8) for the purposes of (4) and (5), the exchange rate from the Euro to the pound sterling for each year beginning on 31 December is the rate applicable on the last day of the preceding October for which the exchange rates for the currencies of all the European Union member states were published in the Official Journal of the European Union.
officer
means, in relation to a body corporate:
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(1) a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity; and
(2) an individual who is a controller of the body.
ONA system
means the PRA’s online notification and applications system, by whatever name known.
outsourcing
means an arrangement of any form between a firm and a service provider by which that service provider performs a process, a service or an activity which would otherwise be undertaken by the firm itself
overseas firm
means a firm which has its registered office (or, if it has no registered office, its head office) outside the UK.
Part 4A permission
means a permission given by the FCA or PRA under Part 4A of FSMA (Permission to carry on regulated activities), or having effect as if so given.
partner
means (in relation to a firm which is a partnership) any person appointed to direct its affairs, including:
(1) a person occupying the position of a partner (by whatever name called); and
(2) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the partners are accustomed to act.
passported activity
means an activity carried on by an EEA firm, or by a UK firm, under an EEA right
permission
means permission to carry on regulated activities.
policy
has the meaning given in Article 2 of the Financial Services and Markets Act 2000 (Meaning of "Policy" and "Policyholder") Order 2001 (SI 2001/2361).
policyholder
has the meaning given in Article 3 of the Financial Services and Markets Act 2000 (Meaning of "Policy" and "Policyholder") Order 2001 (SI 2001/2361).
PRA
means the Prudential Regulation Authority.
PRA Handbook
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means the PRA’s Handbook of rules and guidance.
prudential context
means, in relation to activities carried on by a firm, the context in which the activities have, or might reasonably be regarded as likely to have, a negative effect on:
(1) the safety and soundness of firms; or
(2) the ability of the firm to meet either:
(a) the "fit and proper" test in threshold conditions 4E and 5E (Suitability); or
(b) the applicable requirements and standards under the regulatory system relating to the firm's financial resources.
qualifying parent undertaking
has the meaning given in section 192B of FSMA.
Regulated Activities Order
means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544).
regulatory system
means the arrangements for regulating a firm or other person in or under FSMA, including the threshold conditions, the Fundamental Rules and other rules, the Statements of Principle, codes and guidance given by the PRA and including any relevant directly applicable provisions of a EU Directive or Regulation.
reinsurance
includes retrocession.
Reinsurance Directive
means the Directive of 16 November 2005 of the European Parliament and of the Council (No 2005/68/EC) on reinsurance and amending the First Non-Life Directive and the Third Non-Life Directive as well as the Insurance Groups Directive and the Consolidated Life Directive.
reinsurance undertaking
means an insurance undertaking whose insurance business is restricted to reinsurance.
relevant legislation
means:
(1) FSMA;
(2) the Capital Requirements Regulations;
(3) any other enactment; or
(4) any directly applicable EU regulation.
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relevant person
means any of the following:
(1) a director, partner or equivalent, manager or appointed representative (or where applicable, tied agent) of the firm;
(2) a director, partner or equivalent, or manager of any appointed representative (or where applicable, tied agent) of the firm;
(3) an employee of the firm or of an appointed representative (or where applicable, tied agent) of the firm; as well as any other natural person whose services are placed at the disposal and under the control of the firm or an appointed representative or a tied agent of the firm and who is involved in the provision by the firm of regulated activities; or
(4) a natural person who is directly involved in the provision of services to the firm or its appointed representative (or where applicable, tied agent) under an outsourcing arrangement, for the purpose of the provision by the firm of regulated activities.
Second Life Directive
means the Council Directive of 8 November 1990 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (No 90/619/EEC).
Second Non-Life Directive
means the Council Directive of 22 June 1988 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No 88/357/EEC).
senior management
means those natural persons who exercise executive functions within a firm and who are responsible, and accountable to the management body, for the day-to-day management of the firm.
senior personnel
means those persons who effectively direct the business of the firm, which could include a firm's governing body and other persons who effectively direct the business of the firm.
skilled person
means a person appointed to:
(1) make and deliver to the PRA a report as provided for by section 166 of FSMA (Reports by skilled persons); or
(2) collect or update information as required by the PRA under section 166A of FSMA (Appointment of skilled person to collect and update information).
Society
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means the society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.
standing data
means the information relating to a firm held by the PRA on the following matters:
(1) Communications with a firm:
(a) name;
(b) trading name(s);
(c) registered office;
(d) principal place of business;
(e) website address;
(f) complaints contact and complaints officer; and
(g) the name and email address of the primary compliance contact.
(2) Other information about a firm:
(a) name and address of the firm’s auditor;
(b) accounting reference date; and
(c) locum.
Statement of Principle
means one of the Statements of Principle issued by the PRA under section 64(1A) of FSMA (Conduct: statements and codes) with respect to the conduct of approved persons .
supervisory function
means any function within a firm that is responsible for the supervision of its senior personnel.
syndicate
means one or more persons, to whom a particular syndicate number has been assigned by or under the authority of the Council, carrying out contracts of insurance or effecting contracts of insurance written at Lloyd's.
third country
means a territory or country that is not an EEA State.
third country firm
means an overseas firm that is not an incoming firm.
third country investment firm
a firm which would be a MiFID investment firm if it had its head office in the EEA.
Third Life Directive
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means the Council Directive of 10 November 1992 on the coordination of laws, etc, and amending Directives 79/267/EEC and 90/619/EEC (No 92/96/EEC).
Third Non-Life Directive
means the Council Directive of 18 June 1992 on the coordination of laws, etc, and amending Directives 73/239/EEC and 88/357/EEC (No 92/49/EEC).
tied agent
means a person who, under the full and unconditional responsibility of only one MiFID investment firm or third country investment firm on whose behalf it acts, promotes investment services and/or ancillary services to clients or prospective clients, receives and transmits instructions or orders from the client in respect of investment services or financial instruments, places financial instruments and/or provides advice to clients or prospective clients in respect of those financial instruments or investment services.
top-up permission
means a Part 4A permission given to an incoming EEA firm or an incoming Treaty firm.
undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions).
UK bank
means a UK undertaking that has permission under Part 4A of FSMA to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or a building society.
UK designated investment firm
means a UK undertaking that is a designated investment firm.
UK firm
has the meaning given in paragraph 10 of Schedule 3 to FSMA (EEA Passport Rights).
UK ISPV
means an insurance special purpose vehicle with a Part 4A permission to carry out contracts of insurance or effect contracts of insurance.
UK undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions) whose registered office or, if the undertaking does not have a registered office, whose head office is in any part of the UK.
UK
means United Kingdom.
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unregulated activity
means an activity that is not a regulated activity.
accepting deposits
means the regulated activity specified in article 5 of the Regulated Activities Order (Accepting deposits).
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.
actuarial body
means the Institute and Faculty of Actuaries.
actuary
means a fellow of an actuarial body or (in connection with general insurance business) a Fellow of the Casualty Actuarial Society who is a member of an actuarial body.
affiliated company
means (in relation to a person) an undertaking in the same group as that person.
ancillary activity
means an activity which is not a regulated activity but which is:
(1) carried on in connection with a regulated activity; or
(2) held out as being for the purposes of a regulated activity.
ancillary service
means any of the services listed in Section B of Annex 1 to MiFID.
appointed representative
has the meaning given in s39(2) FSMA.
approved person
means a person in relation to whom the FCA or the PRA has given its approval under section 59 of FSMA (Approval for particular arrangements) for the performance of a controlled function.
associate
means (in relation to a person ("A")):
(1) an affiliated company of A;
(2) an appointed representative of A, or a tied agent of A, or of any affiliated company of A; and
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(3) any other whose business or domestic relationship with A or A’s associate might reasonably be expected to give rise to a community of interest between them which may involve a conflict of interest in dealings with third parties.
bank
means:
(1) a firm with a Part 4A Permission to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or
a building society; or
(2) an EEA bank.
branch
means
(1) (in relation to a credit institution):
(a) a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions;
(b) for the purposes of the CRD and in accordance with Article 38 of the CRD, any number of places of business set up in the same EEA State by a credit institution with headquarters in another EEA State are to be regarded as a single branch; or
(2) (in relation to an investment firm) has the meaning given in Article 4(1)(26) of MiFID.
body corporate
means any body corporate including a body corporate constituted under the law of a country or territory outside the UK.
BRRD
means Directive 2014/59/EU of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU , and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council.
BRRD undertaking
means a CRR firm or a qualifying parent undertaking of a CRR firm.
building society
has the meaning given in section 119 of the Building Societies Act 1986.
business day
means:
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(1) (in relation to anything done or to be done in (including to be submitted to a place in) any part of the UK) any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in that part of the UK;
(2) (in relation to anything done or to be done by reference to a market outside the UK) any day on which that market is normally open for business.
Capital Requirements Regulations
means the Capital Requirements Regulations 2013 (SI 2013/3115).
carrying out contracts of insurance
means the regulated activity specified in article 10(2) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
client
has the meaning given in the FCA Handbook other than for the purposes of the part of the FCA Handbook in Specialist sourcebooks that has the title Professional Firms.
Consolidated Life Directive
means the Council Directive of 5 November 2002 on the taking-up and pursuit of the business of life assurance (No 2002/83/EC), which consolidates the provisions of the First Life Directive, the Second Life Directive and the Third Life Directive.
contracts of general insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
contract of insurance
has the meaning given in Article 3(1) of the Regulated Activities Order.
contracts of long-term insurance
has the meaning given in article 3(1) of the Regulated Activities Order.
controlled function
means a function, relating to the carrying on of a regulated activity by a firm, which is specified by either the FCA or the PRA, under section 59 of FSMA (Approval for particular arrangements).
Council
means the governing body of the Society constituted by section 3 of the Lloyd’s Act 1982.
credit institution
has the meaning given in point (1) of Article 4(1) of the CRR.
CRD
means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit
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institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
CRD credit institution
means a credit institution that has its registered office (or, if it has no registered office, its head office) in an EEA State, excluding an institution to which the CRD does not apply under Article 2 of the CRD.
credit union
has the meaning given in section 31 of the Credit Unions Act 1979.
CRR
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
CRR firm
means a UK bank, a building society or a UK designated investment firm.
cross border services
means:
(1) (in relation to a UK firm) services provided within an EEA State other than the UK under the freedom to provide services; and
(2) (in relation to an incoming EEA firm or an incoming Treaty firm) services provided within the UK under the freedom to provide services.
dealing in investments as principal
means the regulated activity specified in Article 14 of the Regulated Activities Order (Dealing in investments as principal).
designated investment firm
means an investment firm that has been designated by the PRA under Article 3 of Financial Services and Markets Act 2000 (PRA-regulated Activities) Order (S.I. 2013/556).
director
means (in relation to any of the following (whether constituted in the UK or under the law of a country or territory outside it)):
(a) an unincorporated association;
(b) a body corporate;
any person appointed to direct its affairs, including a person who is a member of its governing body and (in accordance with section 417(1) of FSMA):
(i) a person occupying in relation to it the position of a director (by whatever name called); and
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(ii) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that body are accustomed to act.
EBA
means the European Banking Authority.
EEA
means the European Economic Area.
EEA bank
means an incoming EEA firm that is a CRD credit institution.
effecting contracts of insurance
means the regulated activity specified in article 10(1) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).
employee
means an individual:
(1) who is employed or appointed by a person in connection with that person's business, whether under a contract of service or for services or otherwise; or
(2) whose services, under an arrangement between that person and a third party, are placed at the disposal and under the control of that person.
EU instrument
has the meaning given in Part II of Schedule 1 to the European Communities Act 1972.
European Economic Area
means the area established by the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as it has effect for the time being and which consists of the EEA States.
FCA Handbook
means the FCA’s Handbook of rules and guidance as amended from time to time.
financial instruments
mean the instruments specified in Section C of Annex I of MiFID.
firm
means a PRA-authorised person within the meaning of section 2B(5) of FSMA.
First Life Directive
means the Council Directive of 5 March 1979 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (No 79/267/EEC).
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First Non-Life Directive
the Council Directive of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life insurance (No 73/239/EEC).
FSMA
means the Financial Services and Markets Act 2000.
Fundamental Rules
means the rules set out in Fundamental Rules 2.
general insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of general insurance only.
governing body
means the board of directors, committee of management or other governing body of an unincorporated association or body corporate.
guidance
means guidance given by the PRA in the form of supervisory statements or otherwise.
home Member State
has the meaning given in Article 4(1)(43) of the CRR.
IMD insurance intermediary
has the meaning given in article 2(1) of the Insurance Mediation Directive.
incoming EEA firm
means an EEA firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 3 of FSMA.
incoming firm
means an incoming firm within the meaning of section 193 of FSMA.
incoming Treaty firm
means a Treaty firm which is exercising, or has exercised, its right to carry on a regulated activity in the UK in accordance with Schedule 4 of FSMA.
insurance business
means the regulated activities of effecting contracts of insurance or carrying out contracts of insurance.
Insurance Directives
means the Consolidated Life Directive and the First Non-Life Directive, Second Non-Life Directive and Third Non-Life Directive.
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Insurance Groups Directive
means Directive of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance undertakings in an insurance group (1998/78/EC).
Insurance Mediation Directive
means the European Parliament and Council Directive of 9 December 2002 on insurance mediation (No 2002/92/EC).
insurance special purpose vehicle
means an undertaking, other than an insurance undertaking or reinsurance undertaking which has received an official authorisation in accordance with Article 6 of the First Non-Life Directive, Article 4 of the Consolidated Life Directive or Article 3 of the Reinsurance Directive:
(1) which assumes risks from such insurance undertakings or reinsurance undertakings; and
(2) which fully funds its exposures to such risks through the proceeds of a debt issuance or some other financing mechanism where the repayment rights of the providers of such debt or other financing mechanism are subordinated to the undertaking's reinsurance obligations.
insurance undertaking
means an undertaking, whether or not an insurer, which carries on insurance business.
insurer
means a firm with permission to effect contracts of insurance or carry out contracts of insurance (other than a UK ISPV).
internal controls
means the whole system of controls, financial or otherwise, established by the management of a firm in order to:
(1) carry on the business of the firm in an orderly and efficient manner;
(2) ensure adherence to management policies;
(3) safeguard the assets of the firm and other assets for which the firm is responsible; and
(4) secure as far as possible the completeness and accuracy of the firm's records (including those necessary to ensure continuous compliance with the requirements or standards under the regulatory system relating to the adequacy of the firm's financial resources).
investment firm
means any person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.
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investment services and/or activities
means any of the services and activities listed in Section A of Annex I to MiFID.
long-term insurance business
the business of effecting contracts of insurance or carrying out contracts of insurance in each case in relation to contracts of long-term insurance only.
management body
means a firm’s body or bodies, which are appointed in accordance with national law, which are empowered to set the firm’s strategy, objectives and overall direction, and which oversee and monitor management decision-making, and include the persons who effectively direct the business of the firm.
managing agent
has the meaning given in article 3(1) of the Regulated Activities Order.
market risk
means the risk that arises from fluctuations in values of, or income from assets, or in interest or exchange rates.
material outsourcing
means outsourcing services of such importance that weakness, or failure, of the services would cast serious doubt upon the firm's continuing satisfaction of the threshold conditions or compliance with the Fundamental Rules.
member
means a person admitted to membership of the Society or any person by law entitled or bound to administer its affairs.
MiFID II
means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast).
MiFID
means the European Parliament and Council Directive on markets in financial instruments (No. 2004/39/EC).
MiFID business
means investment services and activities and, where relevant, ancillary services carried on by a MiFID investment firm.
MiFID implementing Directive
means Commission Directive No. 2006/73/EC implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.
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MiFID investment firm
means a firm to which MiFID applies.
MiFIR
means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.
mutual
means an insurer which:
(1) if it is a body corporate has no share capital (except a wholly owned subsidiary with no share capital but limited by guarantee); or
(2) is a friendly society; or
(3) is a society registered or deemed to be registered under Co-operative and Benefit Societies Act 2014 or the Industrial and Provident Societies (Northern Ireland) Act 1969.
non-directive firm
(in accordance with the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/774)) a UK domestic firm other than:
(1) a credit institution authorised under the Banking Consolidation Directive;
(2) an investment firm authorised under MiFID;
(3) a management company as defined in article 2(1)(b) of the European Parliament and Council Directive of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (No 2009/65/EC),1 2, 3, 4, as amended (the UCITS Directive), authorised under that directive;
(4) an undertaking pursuing the activity of direct insurance within the meaning of:
(a) article 2 of the Consolidated Life Directive, authorised under that directive; or
(b) article 1 of the First Non-Life Directive, authorised under that directive;
(5) an undertaking pursuing the activity of reinsurance within the meaning of article 2.1(a) of the Reinsurance Directive, authorised under that directive.
non-directive friendly society
means:
(1) a friendly society whose insurance business is restricted to the provision of benefits which vary according to the resources available and in which the contributions of the members are determined on a flat-rate basis;
(2) a friendly society whose long-term insurance business is restricted to the provision of benefits for employed and self-employed persons belonging to an
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undertaking or group of undertakings, or a trade or group of trades, in the event of death or survival or of discontinuance or curtailment of activity (whether or not the commitments arising from such operations are fully covered at all times by mathematical reserves);
(3) a friendly society which undertakes to provide benefits solely in the event of death where the amount of such benefits does not exceed the average funeral costs for a single death or where the benefits are provided in kind;
(4) a friendly society (carrying on long-term insurance business):
(a) whose registered rules contain provisions for calling up additional contributions from members or reducing their benefits or claiming assistance from other persons who have undertaken to provide it; and
(b) whose annual gross premium income (other than from contracts of reinsurance) has not exceeded 5 million Euro for each of the three preceding financial years;
(5) a friendly society (carrying on general insurance business):
(a) whose registered rules contain provisions for calling up additional contributions from members or reducing their benefits;
(b) whose gross premium income (other than from contracts of reinsurance) for the preceding financial year did not exceed 5 million Euro; and
(c) whose members provided at least half of that gross premium income;
(6)
(a) a friendly society whose liabilities in respect of general insurance contracts are fully reinsured with or guaranteed by other mutuals; and;
(b) the mutuals providing the reinsurance or the guarantee are subject to the rules of the First Non-Life Directive.
and
(7) in each case whose insurance business is limited to that described in any of (1) to (6); and
(8) for the purposes of (4) and (5), the exchange rate from the Euro to the pound sterling for each year beginning on 31 December is the rate applicable on the last day of the preceding October for which the exchange rates for the currencies of all the European Union member states were published in the Official Journal of the European Union.
officer
means, in relation to a body corporate:
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(1) a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity; and
(2) an individual who is a controller of the body.
ONA system
means the PRA’s online notification and applications system, by whatever name known.
outsourcing
means an arrangement of any form between a firm and a service provider by which that service provider performs a process, a service or an activity which would otherwise be undertaken by the firm itself
overseas firm
means a firm which has its registered office (or, if it has no registered office, its head office) outside the UK.
Part 4A permission
means a permission given by the FCA or PRA under Part 4A of FSMA (Permission to carry on regulated activities), or having effect as if so given.
partner
means (in relation to a firm which is a partnership) any person appointed to direct its affairs, including:
(1) a person occupying the position of a partner (by whatever name called); and
(2) a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the partners are accustomed to act.
passported activity
means an activity carried on by an EEA firm, or by a UK firm, under an EEA right
permission
means permission to carry on regulated activities.
policy
has the meaning given in Article 2 of the Financial Services and Markets Act 2000 (Meaning of "Policy" and "Policyholder") Order 2001 (SI 2001/2361).
policyholder
has the meaning given in Article 3 of the Financial Services and Markets Act 2000 (Meaning of "Policy" and "Policyholder") Order 2001 (SI 2001/2361).
PRA
means the Prudential Regulation Authority.
PRA Handbook
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means the PRA’s Handbook of rules and guidance.
prudential context
means, in relation to activities carried on by a firm, the context in which the activities have, or might reasonably be regarded as likely to have, a negative effect on:
(1) the safety and soundness of firms; or
(2) the ability of the firm to meet either:
(a) the "fit and proper" test in threshold conditions 4E and 5E (Suitability); or
(b) the applicable requirements and standards under the regulatory system relating to the firm's financial resources.
qualifying parent undertaking
has the meaning given in section 192B of FSMA.
Regulated Activities Order
means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544).
regulatory system
means the arrangements for regulating a firm or other person in or under FSMA, including the threshold conditions, the Fundamental Rules and other rules, the Statements of Principle, codes and guidance given by the PRA and including any relevant directly applicable provisions of a EU Directive or Regulation.
reinsurance
includes retrocession.
Reinsurance Directive
means the Directive of 16 November 2005 of the European Parliament and of the Council (No 2005/68/EC) on reinsurance and amending the First Non-Life Directive and the Third Non-Life Directive as well as the Insurance Groups Directive and the Consolidated Life Directive.
reinsurance undertaking
means an insurance undertaking whose insurance business is restricted to reinsurance.
relevant legislation
means:
(1) FSMA;
(2) the Capital Requirements Regulations;
(3) any other enactment; or
(4) any directly applicable EU regulation.
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relevant person
means any of the following:
(1) a director, partner or equivalent, manager or appointed representative (or where applicable, tied agent) of the firm;
(2) a director, partner or equivalent, or manager of any appointed representative (or where applicable, tied agent) of the firm;
(3) an employee of the firm or of an appointed representative (or where applicable, tied agent) of the firm; as well as any other natural person whose services are placed at the disposal and under the control of the firm or an appointed representative or a tied agent of the firm and who is involved in the provision by the firm of regulated activities; or
(4) a natural person who is directly involved in the provision of services to the firm or its appointed representative (or where applicable, tied agent) under an outsourcing arrangement, for the purpose of the provision by the firm of regulated activities.
Second Life Directive
means the Council Directive of 8 November 1990 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (No 90/619/EEC).
Second Non-Life Directive
means the Council Directive of 22 June 1988 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No 88/357/EEC).
senior management
means those natural persons who exercise executive functions within a firm and who are responsible, and accountable to the management body, for the day-to-day management of the firm.
senior personnel
means those persons who effectively direct the business of the firm, which could include a firm's governing body and other persons who effectively direct the business of the firm.
skilled person
means a person appointed to:
(1) make and deliver to the PRA a report as provided for by section 166 of FSMA (Reports by skilled persons); or
(2) collect or update information as required by the PRA under section 166A of FSMA (Appointment of skilled person to collect and update information).
Society
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means the society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.
standing data
means the information relating to a firm held by the PRA on the following matters:
(1) Communications with a firm:
(a) name;
(b) trading name(s);
(c) registered office;
(d) principal place of business;
(e) website address;
(f) complaints contact and complaints officer; and
(g) the name and email address of the primary compliance contact.
(2) Other information about a firm:
(a) name and address of the firm’s auditor;
(b) accounting reference date; and
(c) locum.
Statement of Principle
means one of the Statements of Principle issued by the PRA under section 64(1A) of FSMA (Conduct: statements and codes) with respect to the conduct of approved persons .
supervisory function
means any function within a firm that is responsible for the supervision of its senior personnel.
syndicate
means one or more persons, to whom a particular syndicate number has been assigned by or under the authority of the Council, carrying out contracts of insurance or effecting contracts of insurance written at Lloyd's.
third country
means a territory or country that is not an EEA State.
third country firm
means an overseas firm that is not an incoming firm.
third country investment firm
a firm which would be a MiFID investment firm if it had its head office in the EEA.
Third Life Directive
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means the Council Directive of 10 November 1992 on the coordination of laws, etc, and amending Directives 79/267/EEC and 90/619/EEC (No 92/96/EEC).
Third Non-Life Directive
means the Council Directive of 18 June 1992 on the coordination of laws, etc, and amending Directives 73/239/EEC and 88/357/EEC (No 92/49/EEC).
tied agent
means a person who, under the full and unconditional responsibility of only one MiFID investment firm or third country investment firm on whose behalf it acts, promotes investment services and/or ancillary services to clients or prospective clients, receives and transmits instructions or orders from the client in respect of investment services or financial instruments, places financial instruments and/or provides advice to clients or prospective clients in respect of those financial instruments or investment services.
top-up permission
means a Part 4A permission given to an incoming EEA firm or an incoming Treaty firm.
undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions).
UK bank
means a UK undertaking that has permission under Part 4A of FSMA to carry on the regulated activity of accepting deposits and is a credit institution, but is not a credit union, friendly society or a building society.
UK designated investment firm
means a UK undertaking that is a designated investment firm.
UK firm
has the meaning given in paragraph 10 of Schedule 3 to FSMA (EEA Passport Rights).
UK ISPV
means an insurance special purpose vehicle with a Part 4A permission to carry out contracts of insurance or effect contracts of insurance.
UK undertaking
means an undertaking within the meaning of section 1161(1) of the Companies Act 2006 (meaning of “undertaking” and related expressions) whose registered office or, if the undertaking does not have a registered office, whose head office is in any part of the UK.
UK
means United Kingdom.
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unregulated activity
means an activity that is not a regulated activity.
