Glossary

accepting deposits

01/02/2014

accounting principles

01/01/2016

means whichever of the following are applicable:

(1) the insurance accounts rules;

(2) the Friendly Societies (Accounts and Related Provisions) Regulations 1994;

(3) Financial Reporting Standards and Statements of Standard Accounting Practice issued or adopted by the Accounting Standards Board;

(4) Statements of Recommended Practice, issued by industry or sectoral bodies recognised for this purpose by the Accounting Standards Board;

(5) international accounting standards within the meaning of EC Regulations No. 1606/2002 of the European Parliament and of the council of 19 July 2002 on the application of international accounting standards, adopted from time to time by the European Commission in accordance with that Regulation;

(6) the Companies Act 1985; and

(7) the Companies Act 2006,

as applicable to the firm for the purpose of its external financial reporting (or as would be applicable if the firm was a company with its head office in the UK).

accounting reference date

02/04/2015

(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.

Accounts Directives

01/01/2016

means Council Directives 2013/34/EC, 91/674/EEC and 83/349/EEC.

Accounts Regulations

01/01/2016

means the Friendly Society (Accounts and Related Provisions) Regulations 1994.

accumulating with-profits policies

01/01/2016

means a with-profits policy which has a readily identifiable current benefit, whether or not this benefit is currently realisable, which is adjusted by an amount explicitly related to the amount of any premium payment and to which additional benefits are added in respect of participation in profits by additions directly related to the current benefit, or a policy with similar characteristics.

actuarial body

19/06/2014

means the Institute and Faculty of Actuaries.

actuarial health insurance

01/01/2016

means health insurance which meets all the conditions set out in Insurance Company – Capital Resources Requirements 13.1.

actuarial investigation

01/07/2016

means an investigation to which Insurance Company – Reporting 5.8 – 5.12 applies.

actuarial valuation date

01/01/2016

means the date as which the mathematical reserves are calculated.

actuary

19/06/2014

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.

administering a benchmark

29/06/2018

means the regulated activity specified in article 63S of the Regulated Activities Order.

admissible assets

01/01/2016

(1) (in relation to an insurer which is not a pure reinsurer) has the meaning in Insurance Company – Capital Resources 13; or

(2) (in relation to a pure reinsurer) means an asset the holding of which is consistent with compliance by the firm with Insurance Company – Risk Management 5.

admission to trading

01/01/2016

means the process by which the exchange permits members of the exchange to enter into transactions in that investment under and subject to the rules of the exchange.

advising on investments

03/08/2015

means the regulated activity, specified in article 53 of the Regulated Activities Order (Advising on investments).

advising on pension transfers and pension opt-outs

03/08/2015

means advising on investments in respect of pension transfers and pension opt-outs.

affected market participant

19/09/2023

has the meaning given in regulation 2(1) of The Insurers (Reorganisation and Winding Up) (Lloyd’s) Regulations 2005 (2005/1998).

affiliated company

01/02/2014

means (in relation to a person) an undertaking in the same group as that person.

agreeing to carry on a regulated activity

03/08/2015

means the regulated activity, specified in article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity).

AIF

03/08/2015

means an alternative investment fund.

AIFM

03/08/2015

means alternative investment fund manager.

AIFM investment management functions

03/08/2015

means investment management functions of an AIFM as set out in 1(a) (portfolio management) or (b) (risk management) of Annex I to AIFMD.

AIFMD

03/08/2015

means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.

aircraft

03/07/2015

means the class of contract of insurance, specified in paragraph 5 of Part I of Schedule 1 to the Regulated Activities Order.

aircraft liability

03/07/2015

means the class of contract of insurance, specified in paragraph 11 of Part I of Schedule 1 to the Regulated Activities Order.

alternative investment fund

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means a collective investment undertaking, including investment compartments thereof which: 

(1) raises capital from a number of investors, with the intention of investing it in accordance with a defined investment policy for the benefit of those investors; and 

(2) does not require authorisation pursuant to article 5 of the UCITS Directive.

alternative investment fund manager

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means a legal person whose regular business is managing one or more alternative investment funds.

analogous non-reinsurance financing agreement

01/01/2016

means analogous non-reinsurance financing agreements, including contingent loans, securitisations and any other arrangements in respect of contracts of insurance that are analogous to contracts of reinsurance in terms of the risks transferred and the finance provided.

ancillary activity

19/06/2014

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 insurance services undertaking

07/07/2023

(1) (in the Financial Conglomerates Part of the PRA Rulebook) has the meaning given in Financial Conglomerates 1.4;

(2) (in relation to the Group Supervision Part of the PRA Rulebook) means, in relation to any undertaking in a group, an undertaking complying with the following conditions:

(a) its principal activity consists of:

(i) owning or managing property;

(ii) managing data-processing services;

(iii) providing health and care services; or

(iv) any other similar activity;

(b) the activity in (a) is ancillary to the principal activity of one or more insurance undertakings; and

(c) those insurance undertakings are also members of that group.

ancillary own funds

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

(1) (in relation to a UK Solvency II firm and Lloyd’s) has the meaning given in Own Funds 2.3 and are determined in accordance with Own Funds 2.3 to 2.7; or

(2) (in relation to an insurance holding company) means an own funds item referred to in Article 89 of the Solvency II Directive, determined in accordance with (1) as if it were a UK Solvency II firm; or

(3) (in relation to a third country branch undertaking) means an own funds item referred to in Article 89 of the Solvency II Directive, determined in accordance with (1) as if it were a UK Solvency II firm.

ancillary service

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means any of the services listed in Part 3A of Schedule 2 to the Regulated Activities Order.

ancillary services undertaking

01/01/2016

means an undertaking, the principal activity of which consists of owning or managing property, managing data-processing services, or a similar activity which is ancillary to the principal activity of one or more credit institutions, investment firms or insurers.

Annex II benchmark administrator

29/06/2018

has the meaning given in the Glossary to the FCA Handbook.

annual report and accounts

03/08/2015

means

(1) (in relation to a company incorporated in the UK) an annual report and annual accounts as those terms are defined in section 471 of the Companies Act 2006 together with an auditor's report prepared in relation to those accounts under sections 495 to 497A of the same Act;
(2) (in relation to any other body) any similar or analogous documents which it is required to prepare whether by its constitution or by the law under which it is established.

appointed representative

02/04/2015

has the meaning given in s39(2) FSMA.

approved counterparty

03/01/2018

means any of the following:

(1) an approved credit institution;

(2) a firm whose permission including dealing in investments as principal with respect to derivatives which are not listed;

(3) a MiFID investment firm whose authorisation (as referred to in Article 5 of MiFID II) authorises it to carry on activities of the kind referred to in (2); or

(4) in respect of a transaction involving a new issue of securities which are to be listed, the issuer or a MiFID investment firm acting on behalf of the issuer.

approved credit institution

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means a credit institution recognised or permitted under the law of the UK to carry on any of the activities set out in Annex 1 to the CRD.

approved derivative

01/01/2016

means a derivative in respect of which the conditions in Insurance Company – Risk Management 6.2 are met.

approved financial institution

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means any of the following:

(1) the European Central Bank;

(2) the central bank of an EEA State;

(3) the International Bank for Reconstruction and Development;

(4) the European Bank for Reconstruction and Development;

(5) the International Finance Corporation;

(6) the International Monetary Fund;

(7) the Inter-American Development Bank;

(8) the African Development Bank;

(9) the Asian Development Bank;

(10) the Caribbean Development Bank;

(11) the European Investment Bank;

(12) the EU;

(13) the European Atomic Energy Community; and

(14) the Bank of England.

approved person

19/06/2014

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.

approved quasi-derivative

01/01/2016

means a quasi-derivative in respect of which the conditions in Insurance Company – Risk Management 6.2 are met.

approved reinsurance to close

01/01/2016

means;

(1) a reinsurance to close effected before 1 January 2005; or

(2) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with the members of that syndicate in a later syndicate year or the members of one other syndicate ("the reinsuring members") that the reinsuring members will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year that is:

(a) effected after 1 January 2005; and

(b) not a balance transfer between two syndicate years where the syndicate has only one member and the member is the same in each of those years; or

(3) an agreement under which members of a syndicate in one syndicate year ("the reinsured members") agree with a subsidiary of the Society that that subsidiary will discharge, or procure the discharge of, or indemnify the reinsured members against, all known and unknown insurance business liabilities of the reinsured members arising out of the insurance business carried on by the reinsured members in that syndicate year ("the reinsured liabilities") and where:

(a) that subsidiary is wholly owned by the Society and if from time to time the subsidiary has an asset or cash flow deficiency such that the subsidiary is unable to meet any of the liabilities which it has reinsured, the Society is legally obliged to pay to the subsidiary a sum equal to that deficiency; and

(b) at the effective date of the agreement, the relevant syndicate year has been open for at least two years after the date at which it would normally have been closed in accordance with the policies and practices in relation to the syndicate concerned.

approved security

01/01/2016

means any of the following:

(1) any security issued or guaranteed by, or the repayment of the principal of which, or the interest of which, is guaranteed by, and any loans to or deposits with, any government, public or local authority or national industry or undertaking, which belongs to an approved State;

(2) any loan to, or deposit with, an approved financial institution; and

(3) any debenture issued before 31 December 1994 by the Agricultural Mortgage Corporation Limited on the Scottish Agricultural Securities Corporation Limited.

approved State

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means any of the following:

(A1) the UK;

(1) an EEA state;

(2) the United States of America;

(3) Canada;

(4) Japan; or

(5) Australia,

other than when that country has rescheduled its external debt.

approved stock lending transaction

01/01/2016

means a stock lending transaction in respect of which the conditions in Insurance Company – Risk Management 8.2 have been met.

arranging (bringing about) deals in investments

03/08/2015

means the regulated activity specified in article 25(1) of the Regulated Activities Order.

arranging safeguarding and administration of assets

03/08/2015

that part of safeguarding and administering investments which consists solely of arranging for one or more other persons to carry on both: 

(a) the safeguarding of assets belonging to another; and

(b) the administration of those assets.

Article 109 undertaking

29/12/2020

means a UK bank, a building society, a UK designated investment firm, a PRA approved parent holding company, a PRA designated parent holding company, a PRA approved intermediate holding company, a PRA designated intermediate holding company, or a PRA designated institution.

Article 18(5) relationship

29/12/2020

means a relationship where undertakings are linked by participations or capital ties other than those referred to in paragraphs (1) and (4) of Article 18 of the CRR.

Article 18(6) relationship

01/01/2016

means a relationship of one of the following kinds:

(1) where an institution exercises a significant influence over one or more institutions or financial institutions, but without holding a participation or other capital ties in these institutions; or

(2) where two or more institutions or financial institutions are placed under single management other than pursuant to a contract or clauses of their memoranda or articles of association.

asset management company

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means an undertaking with a Part 4A permission under Article 51ZA of the Regulated Activities Order (Managing a UCITS) or an undertaking, the registered office of which is outside the UK and which would require such permission if it had its registered office within the UK.

associate

02/04/2015

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
(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.

audit committee

01/01/2019

means a committee established in accordance with Audit Committee 2.1.

authorised contractual scheme

01/01/2016

s237(3) FSMA

authorised electronic money institution

12/03/2023

has the meaning given in regulation 2(1) of the Electronic Money Regulations.

authorised payment institution

12/03/2023

has the meaning given in regulation 2(1) of the Payment Services Regulations.

authorised person

02/04/2015

s417(1) FSMA

authorised UK representative

01/01/2016

means (in relation to a firm) a person resident in the UK who is authorised to act generally, and to accept service of any document, on behalf of the firm.

authorised unit trust scheme

01/01/2016

s237(3) FSMA