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Glossary

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

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Term Definition Legal instruments for this definition

EBA

01/01/2014

means the European Banking Authority.

EEA bank

19/06/2014

means an incoming EEA firm that is a CRD credit institution.

EEA parent financial holding company

01/07/2015

means a parent financial holding company in an EEA State which is not a subsidiary of an institution authorised in any EEA State or of another financial holding company or mixed financial holding company set up in any EEA State.

EEA parent institution

01/07/2015

means a parent institution in an EEA State which is not a subsidiary of another institution authorised in an EEA State or of a financial holding company or mixed financial holding company set up in any EEA State.

EEA parent mixed financial holding company

01/07/2015

means a parent mixed financial holding company in an EEA State which is not a subsidiary of an institution authorised in any EEA State or of another financial holding company or mixed financial holding company set up in any EEA State.

Additional Notes

[Note: Art. 4(1)(20) of the CRR]

EEA State

01/10/2015

has the meaning given in the Interpretation Act 1978 and, where the context requires, includes references to Gibraltar as appropriate.

effecting contracts of insurance

19/06/2014

means the regulated activity specified in article 10(1) of the Regulated Activities Order (Effecting and carrying out contracts of insurance).

EIOPA

01/01/2016

means the European Insurance and Occupational Pensions Authority established in accordance with Regulation (EU) No. 1094/2010 of the European Parliament and of the Council of 24 November 2010.

eligible counterparty

03/01/2018

has the meaning given in the FCA Handbook as amended from time to time for the purposes other than for the purposes of the part of the FCA Handbook in High Level Standards that has the title Principles for Businesses. 

eligible deposit

03/02/2016

has the meaning given in Depositor Protection 2.

eligible own funds

01/01/2016

means:

(1) as to compliance with a UK Solvency II firm’s SCR, the aggregate of the firm’s:

(a) Tier 1 own funds; and

(b) eligible Tier 2 own funds; and

(c) eligible Tier 3 own funds; and

(2) as to compliance with a UK Solvency II firm’s MCR, the aggregate of the firm’s:

(a) Tier 1 own funds; and

(b) eligible Tier 2 own funds; and

(3) as to compliance by a composite firm with the notional life MCR, the aggregate of the firm’s:

(a) Tier 1 own funds; and

(b) Tier 2 basic own funds

     that satisfy the limits in Own Funds 4 as if references to the “MCR” in those provisions were references to the notional life MCR; and the limits in the Solvency II Regulations; and

(4) as to compliance by a composite firm with the notional non-life MCR, the aggregate of the firm’s:

(a) Tier 1 own funds; and

(b) Tier 2 basic own funds

     that satisfy the limits in Own Funds 4.2 as if references to the “MCR” in those provisions were references to the notional non-life MCR; and the limits in the Solvency II Regulations.

(5) as to compliance with the branch SCR, means the aggregate of the third country branch undertaking’s:

(a) Tier 1 own funds; and

(b) (i) Tier 2 own funds; and

      (ii) Tier 3 own funds

     that satisfy the limits in Own Funds 4.1, as if references to the “SCR” in those provisions were references to the branch SCR; and the limits in the Solvency II Regulations.

(6) as to compliance with the branch MCR, means the aggregate of the third country branch undertaking’s:

(a) Tier 1 own funds; and

(b) Tier 2 basic own funds that satisfy the limits in Own Funds 4.2 as if references to the “MCR” in those provisions were references to the branch MCR; and the limits in the Solvency II Regulations.

(7) as to compliance with the EEA SCR, means the aggregate of the third country branch undertaking’s:

(a) Tier 1 own funds; and

(b) (i) Tier 2 own funds; and

      (ii) Tier 3 own funds

     that satisfy the limits in Own Funds 4.1, as if references to the “SCR” in those provisions were references to the EEA SCR; and the limits in the Solvency II Regulations.

(8) as to compliance with the EEA MCR, means the aggregate of the third country branch undertaking’s:

(a) Tier 1 own funds; and

(b) Tier 2 basic own funds that satisfy the limits in Own Funds 4.2, as if references to the “MCR” in those provisions were references to the EEA MCR; and the limits in the Solvency II Regulations.

eligible Tier 2 own funds

01/01/2016

means;

(1) as to compliance with a UK Solvency II firm’s SCR, the UK Solvency II firm’s Tier 2 own funds that satisfy the limits set out in Own Funds 4.1(1) and the Solvency II Regulations; and

(2) as to compliance with a UK Solvency II firm’s MCR, the firm’s Tier 2 basic own funds that satisfy the limits in Own Funds 4.2 and the Solvency II Regulations.

eligible Tier 3 own funds

01/01/2016

means, as to compliance with a UK Solvency II firm’s SCR, the firm’s Tier 3 own funds that satisfy the limits set out in Own Funds 4.1(2).

employee

19/06/2014

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.

employers’ liability

01/01/2016

means a contract of insurance against risks of the persons insured incurring liabilities to their employees.

equity share capital

01/01/2016

means issued share capital excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

equivalent securities

01/01/2016

means securities issued by the same issuer being of an identical type and having the same nominal value, description and amount.

established surplus

01/01/2016

means an excess of assets representing the whole or a particular part of the long-term insurance fund or funds over the liabilities, or a particular part of the liabilities of the insurer attributable to that business as shown by an actuarial investigation.

establishing, operating or winding up a personal pension scheme

03/08/2015

means the regulated activity, specified in article 52(b) of the Regulated Activities Order (Establishing etc. a pension scheme).

establishing, operating or winding up a stakeholder pension scheme

03/08/2015

means the regulated activity, specified in article 52 (a) of the Regulated Activities Order (Establishing etc. a pension scheme).

establishing, operating or winding-up a collective investment scheme

03/08/2015

means the regulated activity specified in article or 51ZE of the Regulated Activities Order (Establishing etc a collective investment scheme).

EU

01/01/2016

This term is defined externally, please refer to -

s1(2) Interpretation Act 1978

EU instrument

19/06/2014

has the meaning given in Part II of Schedule 1 to the European Communities Act 1972.

European Economic Area

02/04/2015

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.

exceptional adverse situation

01/01/2016

means situations where the financial situation of a firm representing a significant share of the market or the affected lines of business is seriously or adversely affected by one or more of the following:

(1) a fall in financial markets which is unforeseen, sharp and steep;

(2) a persistent low interest rate environment;

(3) a high impact catastrophic event.

Excluded Activities and Prohibitions Order

01/01/2019

means the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 (SI 2014/2080).

excluded assets

01/01/2016

means, in relation to a with-profits fund, those assets which the firm has clearly identified in its policy documentation, PPFM, other policyholder communication or otherwise in accordance with any relevant provision of the FCA Handbook as:

(1) available to cover the firm’s liabilities arising from with-profits policies only in particular circumstances; and

(2) not forming part of that with-profits fund.