Close menu

Application provision

1.1 Unless otherwise stated, this Part applies to a non-directive friendly society.

28.1

01/01/2016

The permitted asset exposure limits are those set out in 28.2 to 28.23.

28.2

01/01/2016

5% for a piece of land or a number of pieces of land (or one or more interests in such pieces of land) to which in the most recent proper valuation of such pieces of land an aggregate value is ascribed which is greater than the aggregate of the value of each of such pieces of land or interests valued separately.

28.3

01/01/2016

1% for a reversionary interest or a remainder not falling within 28.2.

28.4

01/01/2016

1% for all debts due or to become due from any one individual (other than a connected individual of the firm), being debts which are fully secured on any dwelling or any land appurtenant (or in Scotland, appertaining) thereto owned or to be purchased by the individual and used or to be used by him for his own residence.

28.5

01/01/2016

0.25% for all debts due or to become due from any one individual, other than debts specified in 28.4.

28.6

01/01/2016

1% for all unsecured debts (other than debts arising under the terms of debt securities or debts from a regulated institution) due or to become due from any one counterparty other than an individual, body corporate or group.

28.7

01/01/2016

1% for all unsecured debts (other than debts arising under the terms of debt securities or debts from a regulated institutiondue or to become due from any one body corporate, taken together with all such debts due or to become due from an affiliated company of that body corporate.

28.8

01/01/2016

2.5% for all unsecured debts (other than debts arising under the terms of debt securities or debts from an approved counterparty) due or to become due from any one regulated institution, taken together with (where that institution is a body corporate) all such debts due or to become due from an affiliated company of that institution.

28.9

01/01/2016

5% for all debts, other than debts arising under the terms of debt securities, due or to become due from any one counterparty, which is not an approved counterparty, taken together with all such debts due or to become due from any affiliated company (other than an approved counterparty) of that counterparty.

28.10

01/01/2016

10% for all debts, other than short-term deposits with a CRD credit institution or debts arising under the terms of debt securitiesdue or to become due from any one approved counterparty, taken together with all such debts due or to become due from any affiliated company of that approved counterparty.

28.11

01/01/2016

20% for all debts due or to become due from a CRD credit institution (or an affiliated company of that institution) taken together unless:

  1. (1) the firm has notified the PRA that it places deposits with that institution; and
  2. (2) the total amount of debts due or to become due does not exceed £2 million.

28.12

01/01/2016

5% for the aggregate of debts of the descriptions in 28.5, 28.6 and 28.7.

28.13

01/01/2016

1% for all investments of a kind which may be valued in accordance with 12 (other than secured debt securitiesdebt securities issued by a regulated institution or investments which are listed and readily realisable) issued by any one issuer taken together with:

  1. (1) all units or other beneficial interests in a collective investment scheme failing within 13.1(3) issued by that issuer; and
  2. (2) all investments of the kinds mentioned in this Chapter issued by an affiliated company of that issuer.

28.14

01/01/2016

10% for the aggregate of assets of any of the descriptions in 28.3 and 28.13.

28.15

01/01/2016

2.5% for all shares and hybrid securities issued by any one issuer taken together with all such securities issued by an affiliated company of that issuer.

28.16

01/01/2016

In the case of a firm effecting contracts of insurance or carrying out contracts of insurance that are with-profits policies and holding shares as long-term insurance business assets, for shares that are ordinary listed shares in the issuer, the permitted asset exposure limit in 28.15 may exceed 2.5% of the long-term insurance business amount to a maximum of 5% of the long-term insurance business amount or the formula result, whichever is lower, where:

  1. (1) the ‘formula result’ means 0.8 multiplied by M/T multiplied by P, expressed as a percentage of the long-term insurance business amount, where:
    1. (a) M = the aggregate market capitalisation of the ordinary listed shares in the issuer,
    2. (b) T = the aggregate market capitalisation of all securities in the Financial Times Stock Exchange All Share Index, and
    3. (c) P = the value of the assets supporting the firm’s long-term insurance business fund, determined in accordance with this Part; and
  2. (2) ‘value of the assets’ means the value of the assets:
  3.       less
    1. (a) the amount of the firm’s mathematical reserves for linked-long-term contract of insurance and non-profit policies net of reinsurance, and
  4.       plus
    1. (b) (if the firm does not effect contracts of insurance or carry out contracts of insurance that are contracts of general insurance) the firm’s net assets outside the firm’s long-term insurance business fund.

28.17

01/01/2016

5% for all securities issued by any one issuer which is not an approved counterparty taken together with (where that issuer is a body corporate) all securities issued by an affiliated company, other than an approved counterparty, of that issuer.

28.18

01/01/2016

10% for all securities issued by any one counterparty.

28.19

01/01/2016

5% for all holdings in any one authorised unit trust scheme or recognised scheme.

28.20

01/01/2016

3% for all cash.

28.21

01/01/2016

5% for all computer equipment.

28.22

01/01/2016

2.5% for all office machinery (other than computer equipment) taken together with all furniture, motor vehicles and other equipment.

28.23

01/01/2016

In the case of an asset which is not covered by 28.2 to 28.22 (other than a derivative), the permitted asset exposure limit is nil.