Close menu

Glossary

The Rulebook Glossary contains defined terms used in more than one Part across the PRA Rulebook.

The full Glossary can be downloaded as a PDF or printed using the icons to the right.

Term Definition Legal instruments for this definition

major business unit

01/01/2016

has the meaning given in Article 1(41) or (42) of the Solvency II Regulations, as appropriate.

making arrangements with a view to transactions in investments

03/08/2015

means the regulated activity, specified in article 25(2) of the Regulated Activities Order (Arranging deals in investments).

management body

01/02/2014

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.

management expenses

01/01/2016

means all expenses, other than commission, incurred in the administration of a firm or its business.

management responsibilities map

07/03/2016

has the meaning given in Allocation of Responsibilities 6.

managing a UCITS

03/08/2015

means the regulated activity, specified in article 51ZA of the Regulated Activities Order (Managing a UCITS).

managing agent

19/06/2014

has the meaning given in article 3(1) of the Regulated Activities Order.

managing an AIF

03/08/2015

means the regulated activity, specified in article 51ZC of the Regulated Activities Order (Managing an AIF).

managing investments

03/08/2015

means the regulated activity, specified in article 37 of the Regulated Activities Order (Managing investments).

mandatory disclosure

07/03/2017

means an obligation in any applicable laws, regulations or rules to declare or disclose information to the public.

margin of solvency

01/01/2016

means the excess of the value of the friendly society’s assets over the amount of its liabilities, that value and amount being determined in accordance with Friendly Society – Asset Valuation, Friendly Society – Liability Valuation and Friendly Society – Overall Resources and Guarantee Fund 8.

market risk

01/01/2016

(1) (except in the Solvency II Firms and Non-Solvency II Firms Sectors of the PRA Rulebook) means the risk that arises from fluctuations in values of, or income from assets, or in interest or exchange rates.

(2) (in the Solvency II Firms and Non-Solvency II Firms Sectors of the PRA Rulebook) means the risk of loss or of adverse change in the financial situation resulting, directly or indirectly, from fluctuations in the level and in the volatility of market prices of assets, liabilities and financial instruments.

Additional Notes

[Note: Art. 13(31) of the Solvency II Directive]

market value

01/01/2016

means the market value as determined in accordance with generally accepted accounting practice.

matching adjustment

01/01/2016

means the adjustment to the relevant risk-free interest rate term structure to calculate the best estimate of a relevant portfolio of insurance or reinsurance obligations in accordance with:

(1) Technical Provisions 6 and 7;

(2) the Solvency II Regulations adopted under Article 86(1)(h) - (i) of the Solvency II Directive; and

(3) any technical information made by EIOPA under Article 77e(1)(b) of the Solvency II Directive and adopted in the Solvency II Regulations under Article 77e(2) of the Solvency II Directive.

matching adjustment approval

01/01/2016

means the approval granted to a firm by the PRA to permit it to apply a matching adjustment for the purposes of calculating the best estimate in relation to a relevant portfolio of insurance and reinsurance obligations.

material outsourcing

01/10/2015

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.

material risk taker

10/12/2018

means an employee (within the meaning in section 63E(9) of FSMA (certification of employees by authorised persons)) of a firm whose professional activities have a material impact on the firm's risk profile.

mathematical reserves

01/01/2016

the provision made by an insurer to cover liabilities (excluding liabilities which have fallen due and liabilities arising from deposit back arrangements) arising under or in connection with contracts of long-term insurance.

MCR

01/01/2016

means the minimum capital requirement calculated in accordance with the Minimum Capital Requirement Part of the PRA Rulebook.

member

19/06/2014

means a person admitted to membership of the Society or any person by law entitled or bound to administer its affairs.

MiFID business

02/04/2015

means investment services and activities and, where relevant, ancillary services carried on by a MiFID investment firm.

MiFID II

19/01/2015

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 investment firm

03/01/2018

means a firm to which MiFID II applies.

MiFIR

19/01/2015

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.

minimum guarantee fund

01/01/2016

means an amount calculated in accordance with Friendly Society - Overall Resources and Guarantee Fund 6 for long-term insurance business and Friendly Society - Overall Resources and Guarantee Fund 7 for general insurance business, whether the required margin of solvency is greater or less than that amount.

mixed financial holding company

01/01/2016

(in the Solvency II Firms Sector of the PRA Rulebook) means a mixed financial holding company as defined in Article 2(15) of Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate.

Additional Notes

[Note: Art. 212(1)(h) of the Solvency II Directive]

mixed-activity holding company

19/01/2015

has the meaning set out at point 22 of Article 4(1) of the CRR.

MODR

03/01/2018

means the Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing MiFID II 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.

money

01/01/2016

means any form of money, including cheques and other payable orders.

money-market instruments

01/01/2016

means those classes of financial instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment.

Additional Notes

[Note: article 4(1)(19) of MiFID]

month

01/01/2016

This term is defined externally, please refer to -

Schedule 1, Interpretation Act 1978

motor vehicle liability

01/01/2016

means the class of contract of insurance, specified in paragraph 10 of Part I of Schedule 1 to the Regulated Activities Order.

MTF

03/01/2018

has the meaning given in Article 4(1)(22) MiFID II.

mutual

01/10/2015

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 Community Benefit Societies Act 2014 or the Industrial and Provident Societies (Northern Ireland) Act 1969.

mutual-type group

01/01/2016

means a group of undertakings that is based on the establishment, contractually or otherwise, of strong and sustainable financial relationships among those undertakings, and that may include mutual or mutual-type associations, provided that:

(1) one of those undertakings effectively exercises, through centralised coordination, a dominant influence over the decisions, including financial decisions, of the other undertakings that are part of the group of undertakings; and

(2) the establishment and dissolution of such relationships for the purposes of Title III of the Solvency II Directive are subject to prior approval by the group supervisor,

where the undertaking exercising the centralised coordination shall be considered as the parent undertaking, and the other undertakings shall be considered as subsidiary undertakings.

Additional Notes

[Note: Art. 212(1)(c)(ii) of the Solvency II Directive]