• Financial Group Capital Resources

    • PRU 8.3.4 PRU 8.3.4

      (1) An Authorised Person in Category 1, 2 or 5 must calculate its Financial Group Capital Resources by applying either of the following methods, excluding those amounts referred to in Rule 8.3.5:
      (a) the accounting consolidation method, which calculates the Capital Resources of the Financial Group based on the Financial Group's consolidated financial statements; or
      (b) the aggregation method, which is the sum of:
      (i) the Capital Resources of the Parent of the Financial Group;
      (ii) subject to (2), the Capital Resources of any Authorised Persons and Financial Institutions included in the Financial Group; and
      (iii) the Financial Group's proportionate share of Capital Resources in Financial Institutions not included in the Financial Group in which any member of the Financial Group has a participation.
      (2) For the purposes of (1)(b)(ii), an investment by one Financial Group member in another must not be included.

      • Guidance

        The calculation of Financial Group Capital Resources is subject to the provisions in Part 4 of Chapter 3.

    • PRU 8.3.5 PRU 8.3.5

      When calculating the Financial Group Capital Resources of a Financial Group, an Authorised Person must not include Capital Resources or Adjusted Capital Resources (as the case may be) of subsidiaries or participations of that Financial Group to the extent that those Capital Resources or Adjusted Capital Resources:

      (a) exceed the entity requirement in respect of that Subsidiary or participation, calculated in accordance with Rule 8.3.3; and
      (b) are not freely transferable within the Financial Group.

      • Guidance

        1. Because the Financial Group Capital Requirement set out in Rule 8.3.3 includes Capital Requirements in respect of Group entities, Capital Resources may be included in the calculation of Financial Group Capital Resources to the extent of those requirements. Capital that is surplus to those requirements is, however, subject to an additional condition before it may be taken into account for the purposes of Financial Group capital adequacy.
        2. In general, Capital Resources or Adjusted Capital Resources are considered not to be freely transferable if they are subject to a legal or constructive limitation on their transferability, whether that transfer would be made by dividend, return of capital or other form of distribution. Examples of relevant limitations might include obligations to maintain minimum Capital Requirements to meet domestic solvency requirements, or to comply with debt covenants.

    • PRU 8.3.6

      Deductions for Qualifying Holdings under Section 3.14 may be calculated based on the Group's total T1 and T2 Capital.