safeguarding and administering investments
the
regulated activity , specified in article 40 of the
Regulated Activities Order (Safeguarding and administering investments), which is in summary: the safeguarding of assets belonging to another and the administration of those assets, or arranging for one or more other
persons to carry on that activity, where:
(b) the arrangements for their safeguarding and administration are such that the assets may consist of or include
designated investments, and either the assets have at any time since 1 June 1997 done so, or the arrangements have at any time (whether before or after that date) been held out as ones under which
designated investments would be safeguarded and administered.
2, 5, 22safeguarding and administration of assets (without arranging)
scheme management activity
scheme of operations
a scheme which:
(a) describes the nature of the risks which the
insurer is underwriting, or intends to underwrite, and the guiding principles which it intends to follow in reinsuring or covering those risks; and
scheme pension
a scheme pension, as defined in paragraph 2 of Schedule 28 to the Finance Act 2004, which is in summary a pension payable until a pension scheme member's death, or until the later of the member's death and the end of a term not exceeding 10 years.
383938scientific research based company
(in
LR) a
company primarily involved in the laboratory research and development of chemical or biological products or processes or any other similar innovative science based company.
33SCV implementation report
SDL
4(in
BSOCS) the total of share and deposit liabilities, excluding amounts that qualify as
own funds but including accrued interest not yet payable.
SDRT provision
a
charge of such amount or at such rate as is determined by the
authorised fund manager to be made as a provision for stamp duty reserve tax for which the
ICVC may become liable under the Stamp Duty and Stamp Duty Reserve Tax (Open-Ended Investment Companies)(Amendment No.2) Regulations 2000 or the
trustee may become liable under Schedule 19to the Finance Act 1999 in respect of a surrender of
units to the
authorised fund manager.
2Second Life Directive
the Council Directive of 8 November 1990 on the coordination of laws, etc and laying down provisions relating to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (No 90/619/EEC).
2Second Non-Life Directive
the Council Directive of 22 June 1988 on the coordination of laws, etc and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (No 88/357/EEC).
2secondary material
(as more fully described in section 394 of the
Act (Access to Authority material)) material, other than that which the
FSA relied on in reaching its decision, which:
(a) the
FSA considered in reaching its decision; or
(b) the
FSA obtained in connection with, that is, in the investigation of, the matter in question.
2secondary pooling event
2, 13(2) (in
CASS 5) an event that occurs in the circumstances described in
CASS 5.6.14 R (Failure of a bank, other broker or settlement agent: secondary pooling events).
13(3) (in
CASS 7and
CASS 7A)
28 an event that occurs in the circumstances described in
28 CASS 7A.3.1R28 (Failure of a bank, intermediate broker, settlement agent or OTC counterparty: secondary pooling events).
12 section 178 notice
(in accordance with section 178(3) of the
Act) a notice given to the
FSA under section 178 of the
Act.
43section 43 capital requirements
the financial supervision requirements of the
FSA for the purposes of the listing arrangements made under section 43 of the Financial Services Act 1986.
2sectoral rules
44(in relation to a
financial sector) rules and requirements relating to the prudential supervision of
regulated entities applicable to
regulated entities in that
financial sector as follows:
(c) (for all other purposes) rules and requirements
7 of the
FSA;
777and so that:
(d) (in relation to prudential rules about consolidated supervision for any
financial sector) those requirements include ones relating to the form and extent of consolidation;
(e) (in relation to any
financial sector) those requirements include ones relating to the eligibility of different types of capital;
(f) (in relation to any
financial sector) those requirements include both ones applying on a solo basis and ones applying on a consolidated basis;
(g) (in relation to the
insurance sector) references in this definition to consolidated supervision are to supplementary supervision, similar expressions being interpreted accordingly;
46 and
7 secured debt
187a debt fully secured on:
18, 16(a) assets whose value at least equals the amount of debt; or
18, 16 secured lending transaction
7(in accordance with point 2 of Part 1 of Annex VIII of the
Banking Consolidation Directive (Eligibility of credit risk mitigation)) any transaction giving rise to an
exposure secured by collateral which does not include a provision conferring upon the
person with the
exposure the right to receive margin frequently.
securities and futures firm
47, 48(
47, 48subject to
BIPRU TP 1 (Revised definition of securities and futures firm for certain transitional purposes))
7a
firm whose
permitted activities include
designated investment business, which is not an
authorised professional firm,
bank,
BIPRU investment firm(unless it is an
exempt BIPRU commodities firm)
38,
749, 50 building society,
credit union,
friendly society,
ICVC,
insurer,
media firm,
service company,
incoming EEA firm (without a
top-up permission),
incoming Treaty firm (without a
top-up permission),
UCITS management company or
UCITS qualifier (without a
top-up permission), whose
permission does not include a
requirement that it comply with
IPRU(INV) 5 (Investment management firms) or 13 (Personal investment firms), and which is within (a), (b), (c), (d), (e)
38, (f) or (g)
38:
(a) a
firm (other than one falling within (d)):
(ii) which was not, immediately before
commencement, subject to the financial supervision requirements of the
FSA (under section 43 of the Financial Services Act 1986), or
PIA or
IMRO (under lead regulation arrangements);
securities financing transaction
(1) (in
COBS, in
CASS) an instance of stock lending or stock borrowing or the lending or borrowing of other
financial instruments, a repurchase or reverse repurchase transaction, or a buy-sell back or sell-buy back transaction.
12[Note: article 2(10) of the
MiFID Regulation]
12(2) (in any other case) any of the following:
127securities issued in a continuous and repeated manner
(in
PR) (as defined in Article 2.1(l) of the
prospectus directive) issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months.
33securities or commodities borrowing
securities or commodities lending
securities or commodities lending or borrowing transaction
securitisation
31, 7(1) (subject to (2)) a process by which assets are sold to a bankruptcy-remote
special purpose vehicle in return for immediate cash payment and that vehicle raises the immediate cash payment through the issue of debt securities in the form of tradable notes or commercial paper.
7(2) (in accordance with Article 4(36) of the
Banking Consolidation Directive (Definitions) and in
BIPRU) a transaction or scheme whereby the credit risk associated with an
exposure or pool of
exposures is
tranched having the following characteristics:
7(a) payments in the transaction or scheme are dependent upon the performance of the
exposure or pool of
exposures; and
7(b) the subordination of
tranches determines the distribution of
losses during the ongoing life of the transaction or scheme.
7 securitisation special purpose entity
7(in accordance with Article 4(44) of the
Banking Consolidation Directive (Definitions)) a corporation, trust or other entity, other than a
credit institution, organised for carrying on a
securitisation or
securitisations (within the meaning of paragraph (2) of the definition of securitisation), the activities of which are limited to those appropriate to accomplishing that objective, the structure of which is intended to isolate the obligations of the
SSPE from those of the
originator, and the holders of the beneficial interests in which have the right to pledge or exchange those interests without restriction.
security
(2) (in
LR57) (in accordance with section 102A of the
Act) anything which has been, or may be admitted to the
official list.
33self-invested personal pension scheme
8 an arrangement which forms all or part of a
personal pension scheme, which gives the member the power to direct how some or all of the member's contributions are invested.
sell
(in accordance with article 3(1) of the
Regulated Activities Order (Interpretation)) (in relation to any
investment) sell in any way, including disposing of the
investment for valuable consideration;in this definition, "disposing" includes:
(a) (in relation to an
investment consisting of rights under a contract):
(i) surrendering, assigning or converting those rights; or
(ii) assuming the corresponding liabilities under the contract;
(b) (in relation to an
investment consisting of rights under other arrangements) assuming the corresponding liabilities under the arrangements; and
(c) (except in
58 COLL58) (in relation to any other
investment) issuing or creating the
investment or granting the rights or interests of which it consists.
sending dematerialised instructions
the
regulated activity, specified in article 45(1)of the
Regulated Activities Order, of sending, on behalf of another
person, dematerialised instructions relating to a
security, where those instructions are sent by means of a relevant system in respect of which an operator is approved under the
592001
59 Regulations;in this definition:
(a) "the
592001
59 Regulations" means the Uncertificated Securities Regulations
592001 (SI 2001/3755)
59;
(b) "dematerialised instruction" and "operator" have the meaning given by regulation 3 of the
592001
59 Regulations.
2senior management
7(in
BIPRU 7.10 (Use of a value at risk model) and in relation to a
firm) the
firm's governing body and those of the firm's
senior managers and other senior management who have responsibilities relating to the measurement and control of the risks which the
firm's VaR model is designed to measure or whose responsibilities require them to take into account those risks.
senior manager
an individual other than a
director:
(b) to whom the
governing body of the
firm, or a member of the
governing body of the
firm, has given responsibility, either alone or jointly with others, for management and supervision;
(c) who, if the individual is employed by the
firm, reports directly to:
(iv) the head of a significant business unit; and
(d) who, if the individual is employed by a
body corporate within the
group, reports directly to a
person who is the equivalent of a body or
person referred to in (c).
2series of transactions
a series of transactions
executed with a view to achieving one investment decision or objective.
2SERV
the Handbook Guide for service companies.
5, 6service conditions
(in accordance with paragraph 14 of Schedule 3 to the
Act (EEA Passport Rights)) the conditions that:
(c) if the
firm falls within paragraph (d) of that definition, its
Home State regulator has informed it that the regulator's notice has been sent to the
FSA; and
13services and costs disclosure document
SETS
the Stock Exchange Electronic Trading Service.
2settlement agent
a
person with or through whom the
firm effects settlement of
UK -settled or foreign-settled transactions.
2settlement decision makers
64(in
57 DEPP and
EG57) two members of the
FSA's65 senior management, one of whom will be
65 of at least director of division level (which may include an acting director)
66 and the other of whom will be of at least head of department level,
65 with responsibility for deciding whether to give
statutory notices in the circumstances described in
57DEPP 5.
57 At least one of the decision makers will not be from the Enforcement and Financial Crime Division.
65 settlement decision procedure
settlement discount scheme
64(in
57 DEPP and
EG57) the scheme described in
57 DEPP 6.757 by which the financial penalty that might otherwise be payable, or the length of the period of suspension or restriction that might otherwise be imposed,
66 in respect of a
person's misconduct or contravention may be reduced to reflect the timing of any settlement agreement.
Seventh Company Law Directive
the Council Directive of 13 June 1983 on consolidated accounts (No 83/349/EEC).
2SFA
the Securities and Futures Authority Limited.
2SFA Complaints Bureau
the first stage of the
SFA scheme, which aimed to resolve complaints by conciliation.
5SFA Consumer Arbitration Scheme
the second stage of the
SFA scheme, which determined complaints by means of arbitration.
5shadow director
(in
LR) as in sub-paragraph (b) of the definition of director in section 417(1) of the
Act.
share
(3) (in
68 DTR68 and
LR33, and in
FEES where relevant to
68 DTR68 or
LR69) (in accordance with section
7070, 7171, 72540(1) of the Companies Act 2006
72) a share in the share capital of a
company, and includes:
67(a) stock (except where a distinction between shares and stock is express or implied);
73(c) in chapters 4, 5
73, 6 and 7
73 of
DTR a convertible share.
68(5) (in
SUP 11 (Controllers and close links) and
SUP 16 (Reporting requirements)) (in accordance with section 422 of the
Act):
(a) in relation to an
undertaking with share capital, allotted shares;
(b) in relation to an
undertaking with capital but no share capital, rights to share in the capital of the
undertaking;
(c) in relation to an
undertaking without capital, interests:
(i) conferring any right to share in the profits, or liability to contribute to the losses, of the
undertaking; or
(ii) giving rise to an obligation to contribute to the debts or expenses of the
undertaking in the event of a winding up.
43shared appreciation mortgage
shareholder
(1)
68(in relation to an
ICVC29):
(2) (in relation to chapters 5 [ ] of
DTR) any natural person or legal entity governed by private or public law, who holds directly or indirectly:
68(b)
shares of the
issuer in its own name, but on behalf of another natural person or legal entity;
68(c) depository receipts, in which case the holder of the depository receipt shall be considered as the shareholder of the underlying
shares represented by the depository receipts.
68short-term annuity
39(as defined in paragraph 6 of Schedule 28 to the Finance Act 2004) in relation to a member of a pension scheme, an annuity payable to the member if:
(a) it is purchased by the application of sums or assets representing the whole or any part of the member's
75 drawdown
75 pension fund (as defined in paragraph 8 of that Schedule) in respect of an arrangement;
(b) it is payable by an insurance company;
(c) the member had an opportunity to select an insurance company;
(d) it is payable for a term which does not exceed five years; and
75(e) it is either a level annuity, an increasing annuity or a relevant linked annuity.
short-term money market fund
sickness
(in relation to a
class of
contract of insurance) the
class of
contract of insurance, specified in paragraph 2 of Part I of Schedule 1 to the
Regulated Activities Order (Contracts of general insurance), providing fixed pecuniary benefits or benefits in the nature of indemnity (or a combination of both) against risks of loss to the
persons insured attributable to sickness or infirmity, but excluding contracts within paragraph IV of Part II of Schedule 1 to the Regulated Activities Order (Permanent health).
2sickness or distressed circumstances contract
any contract in accordance with which benefits are provided for the relief or maintenance of any
person during sickness or when in distressed circumstances.
2SIFA
the Handbook Guide: "Using the FSA Handbook: an Overview for small IFA firms"
6significant influence function
significant management function
simple capital issuer
7a
BIPRU firm that meets the following conditions:
(a) it does not raise capital through a special purpose vehicle;
simplified buffer requirement
simplified ILAS BIPRU firm
simplified prospectus scheme
Single Market Directives
12(b) the Insurance Directives (within the meaning of paragraph 1 of Schedule 3 to the
Act)
12;
13 single-priced authorised fund
skilled person
a
person appointed to make a report required by section 166 of the
Act (Reports by skilled
persons) for provision to the
FSA and who must be a
person:
(a) nominated or approved by the
FSA ; and
(b) appearing to the
FSA to have the skills necessary to make a report on the matter concerned.
2small and medium-sized enterprise
(in
PR) (as defined in Article 2.1(f) of the
prospectus directive) companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: an average number of employees during the financial year of less than 250, a total balance sheet not exceeding €43,000,000 and an annual net turnover not exceeding €50,000,000.
33small business
(in
COMP) a
partnership,
body corporate, unincorporated association or mutual association with an annual turnover of less than £1 million (or its equivalent in any other currency at the relevant time).
2small electronic money institution
small friendly society function
small payment institution
small personal investment firm
small self-administered scheme
an
occupational pension scheme of a kind described in article 4(4) and 4(5) of the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 (SI 2001/1177).
2smaller denomination share
a
share to which are attached rights in a smaller denomination as provided by regulation 45 of the
OEIC regulations.
2smallest financial sector
smoothed linked long term stakeholder product
Society's basic market activity
Society's regulatory functions
the
Society's powers, duties or functions in relation to
members or
underwriting agents which are or may be exercised for the purposes of supervising or regulating the market at Lloyd's.
2Society's secondary market activity
(in accordance with section 315(2)(b) of the
Act (The Society: authorisation and permission)) arranging deals in participation in Lloyd's syndicates.
2sole trader
an individual who is a
firm.
2solicited real time financial promotion
solicited real time qualifying credit promotion
solo capital resources
44, 77(1) (for the purposes of GENPRU 3 and INSPRU 6) capital resources that are or would be eligible as capital under the
sectoral rules that apply for the purpose of calculating its
solo capital resources requirement. Paragraph 6.8 of GENPRU 3 Ann 1R (Solo capital resources requirement: the insurance sector) applies for the purpose of this definition in the same way as it does for the definition of
solo capital resources requirement.
7 solo capital resources requirement
44, 746(1) (for the purpose of GENPRU 3) a capital resources requirement calculated on a solo basis as defined in paragraph 6.2 to 6.7 of GENPRU 3 Ann 1R.
7(2) (for the purposes of INSPRU 6) a capital resources requirement calculated on a solo basis as defined in paragraph 6.2 to 6.7 of GENPRU 3 Ann 1R as it would apply if references to
financial conglomerate in those paragraphs were replaced with references to
insurance group.
7(3) (for the purposes of GENPRU 2.2.214R (Deductions from tiers one and two: Material holdings)) a capital resources requirement calculated on a solo basis as defined in paragraph 6.2 to 6.7 of GENPRU 3 Ann 1R as those paragraphs apply to the
insurance sector.
7 solo consolidation waiver
7a waiver of the type described in
BIPRU 2.1 (Solo consolidation).
Solvency 1 Directive
18the Directive of the European Parliament and of the Council of 5 March 2002 amending Council Directive 79/267/EEC as regards the solvency margin requirements for life assurance undertakings (No. 2002/12/EC).
Solvency 2 Directive
19the Directive of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (No. 2009/138/EC).
sovereign large exposure waiver
sovereign, institution and corporate IRB exposure class
special adjustment
91(in
IPRU(INV) 13) a
position risk adjustment, counterparty risk adjustment and foreign exchange adjustment.
special purpose vehicle
(2) (except in
PR) a
body corporate, explicitly established for the purpose of securitising assets, whose sole purpose (either generally or when acting in a particular capacity) is to carry out one or more of the following functions:
33(b) redeeming or terminating or repurchasing (whether with a view to re-issue or to cancellation) an issue (in whole or part) of
designated investments, other than
life policies;
specialised lending exposure
specialist investor
(in
LR) an investor who is particularly knowledgeable in investment matters.
33specialist securities
(in
LR and
FEES69)
securities which, because of their nature, are normally bought and traded by a limited number of investors who are particularly knowledgeable in investment matters.
33specialist securitised derivative
(in
LR) a
securitised derivative which because of its nature is normally bought and traded by a limited number of investors who are particularly knowledgeable in investment matters.
33specific non-real time financial promotion
specific risk
18, 7(1) (in
SYSC) unique risk that is due to the individual nature of an asset and can potentially be diversified.
7 specific risk backtesting exception
specific wrong-way risk
7(in accordance with Part 1 of Annex III of the
Banking Consolidation Directive (Definitions) and for the purpose of
BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the risk that arises when the exposure to a particular counterparty is positively correlated with the
probability of default of the counterparty due to the nature of the transactions with the counterparty; a
firm is exposed to
specific wrong-way risk if the future exposure to a specific counterparty is expected to be high when the counterparty's
probability of default is also high.
sponsor
33, 7(1) (in
LR) a approved, under section 88 of the by the
FSA, as a sponsor.
7 sponsor service
a service relating to a matter referred to in
LR 8.2 that a
sponsor provides or is requested or appointed to provide and that is for the purpose of the
sponsor complying with
LR 8.3.1 R or
LR 8.4. This definition includes preparatory work that a
sponsor may undertake before a decision is taken as to whether or not it will act as
sponsor for a
company or in relation to a transaction. But nothing in this definition is to be taken as requiring a
sponsor to agree to act as a
sponsor for a
company or in relation to a transaction.
93spread bet
a
contract for differences that is a gaming contract, whether or not section 412 of the
Act (Gaming contracts) applies to the contract; in this definition, "gaming" has the meaning given in the Gaming Act 1968, which is in summary: the playing of a game of chance for winnings in money or money's worth, whether any
person playing the game is at risk of losing any money or money's worth or not.
2spread risk
18the risk that a spread (that is, the difference in price or yield) between two variables will change.
SPV
7(1) (in GENPRU 2.2 (Capital resources)) has the meaning in GENPRU 2.2.126R (Other tier one capital: innovative tier one capital: indirectly issued tier one capital).
(2) (in
BIPRU 8 (Group risk - consolidation)) has the meaning in
BIPRU 8.6.15 R (Indirectly issued capital and group capital resources).
staff mortgage
94a
regulated mortgage contract between an employer, or an
undertaking in the same
group as the employer, as lender and the employee (alone or with another
person) as borrower to defray money applied for any of the following purposes:
(a) acquiring any residential land which was intended, at the time of the acquisition, for occupation by the employee as their home;
(b) carrying out repairs or improvements to any residential land which was intended, at the time of taking out the loan, for occupation by the employee as their home; or
(c) payments in respect of a loan (whether of interest or capital).
stakeholder CTF
95, 20a
CTF that has the characteristics, and complies with the conditions, set out in paragraph 2 of the Schedule to the
CTF Regulations.
stakeholder pension scheme
8382838a scheme that meets the conditions in section 1 of the Welfare Reform and Pensions Act 1999 or article 3 of the Welfare Reform and Pensions (Northern Ireland) Order 1999.
38 Stakeholder Regulations
20the Financial Services and Markets Act 2000 (Stakeholder Products) Regulations 2004 (SI 2004/2738).
standard CIU look through method
standard equity method
7the method of calculating the
equity PRR set out in BIPRU 7.3.32R (Standard equity method).
standard frequency liquidity reporting firm
standard listing (shares)
standard market risk PRR rules
standard method of internal client money reconciliation
standardised approach
7one of the following:
(a) (where expressed to relate to credit risk) the method for calculating capital requirements for credit risk in
BIPRU 3 (Credit risk) and BIPRU 9.2.1R(1) and BIPRU 9.11 (Standardised approach);
(c) (where not expressed to relate to any risk and used in
BIPRU 3,
BIPRU 4 (IRB approach),
BIPRU 5 (Credit risk mitigation),
BIPRU 9 (Securitisation) or
BIPRU 10 88(Large exposures
88 requirements)) it has the meaning in (a);
(d) (where not expressed to relate to any risk and used in BIPRU 6 (Operational risk)) it has the meaning in (b);
(e) (where the one of the approaches in (a) to (d) is being applied on a consolidated basis) that approach as applied on a consolidated basis in accordance with BIPRU 8 (Group risk - consolidation); or
(f) when the reference is to the rules of or administered by a
regulatory body other than the
FSA, whatever corresponds to the approach in (a) to (e), as the case may be, under those rules.
standardised credit risk exposure class
7(in relation to the
standardised approach to credit risk) one of the classes of exposure set out in BIPRU 3.2.9R (Exposure classes).
standardised deterministic projection
standing independent valuer
state finance organisation
67a legal person other than a
company:
(b) which is set up by or pursuant to a special law;
(c) whose activities are governed by that law and consist solely of raising funds under state control through the issue of
debt securities;
(d) which is financed by means of the resources they have raised and resources provided by the
EEA state; and
(e) the
debt securities issued by it are considered by the law of the relevant
EEA state as securities issued or guaranteed by that state.
state monopoly
67a
company or other legal person which is a national of an
EEA state and which:
(a) in carrying on its business benefits from a monopoly right granted by an
EEA state; and
(b) is set up by or pursuant to a special law or whose borrowings are unconditionally and irrevocably guaranteed by an
EEA state or one of the federated states of an
EEA state.
State of the commitment
(in accordance with paragraph 6(1) of Schedule 12 to the
Act (Transfer schemes: certificates)) (in relation to a commitment entered into at any date):
(a) if the
policyholder is an individual, the State in which he had his habitual residence at that date;
(b) if the
policyholder is not an individual, the State in which the establishment of the
policyholder to which the commitment relates was established at that date;
in this definition, "commitment" means (in accordance with article 2 of the Financial Services and Markets Act 2000 (Control of Business Transfers) (Requirements on Applicants) Regulations 2001 (SI 2001/3625))
21 any contract of insurance of a kind referred to in article
212
21of the
22, 23, 24, 21Consolidated Life Directive.
21State of the risk
(in accordance with paragraph 6(3) of Schedule 12 to the
Act (Transfer schemes: certificates)) (in relation to the
EEA State in which a risk is situated):
(a) if the insurance relates to a building or to a building and its contents (so far as the contents are covered by the same policy), the
EEA State in which the building is situated;
(b) if the insurance relates to a vehicle of any type, the
EEA State of registration;
(c) in the case of
policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), the
EEA State in which the
policyholder took out the
policy;
(d) in a case not covered by (a) to (c):
(i) if the
policyholder is an individual, the
EEA State in which he has his habitual residence at the date when the contract is entered into; and
22, 24Statement of Principle
one of the Statements of Principle issued by the
FSA under section 64(1) of the
Act (Conduct: Statements and codes) with respect to the conduct of
approved persons and set out in
APER.
2statutory auditor
73a statutory auditor as that term is defined in section 1210 of the Companies Act 2006.
statutory money purchase illustration
27an annual illustration of the contributions made for the benefit of, and the potential benefits due to, a member of a
personal pension scheme, which is prepared in accordance with the Personal Pension Schemes (Disclosure of Information) Regulations 1987 (SI 1987/1110).
statutory notice associated decision
a decision which is made by the
FSA and which is associated with a decision to give a
statutory notice, including a decision:
(a) to determine or extend the period for making representations;
(b) to determine whether a copy of the
statutory notice needs to be given to any third party and the period for him to make representations;
(c) to refuse access to
FSA material.
98statutory notice decision
step-up
18, 718, 7(in relation to any item of capital) any change in the
coupon rate on that item that results in an increase in the amount payable at any time, including a change already provided in the original terms governing those payments. A step-up:
7(a) includes (in the case of a fixed rate) an increase in that
coupon rate;
7(b) includes (in the case of a floating rate calculated by adding a fixed amount to a fluctuating amount) an increase in that fixed amount;
7(c) includes (in the case of a floating rate) a change in the benchmark by reference to which the fluctuating element of the
coupon is calculated that results in an increase in the absolute amount of the
coupon; and
7(d) does not include (in the case of a floating rate) an increase in the absolute amount of the
coupon caused by fluctuations in the fluctuating figure by reference to which the absolute amount of the
coupon floats.
7 stochastic projection
a
projection showing a summary of results from repeated simulations using an investment model, where the model uses key financial parameters which are subject to random variations and are projected into the future.
99stock financing
7a transaction where a
physical commodity is sold forward and the cost of funding is locked in until the date of the forward sale.
stocks and shares component
store card
a card restricted to paying for goods or services from a particular supplier or group of suppliers and where the price of the goods or services is paid directly to the supplier or group of suppliers by the customer or the
firm, but excluding a
plastic card used to pay for goods or services through a network such as Visa or MasterCard.
2strategic investment
100an investment which:
(a) is made for a strategic purpose;
(b) is made for an expected duration consistent with that purpose and is, or has the potential to be, illiquid or hard to value; and
structured capital-at-risk product
a product, other than a
derivative, which provides an agreed level of income or growth over a specified investment period and displays the following characteristics:
(a) the
customer is exposed to a range of outcomes in respect of the return of initial capital invested;
(b) the return of initial capital invested at the end of the investment period is linked by a pre-set formula to the performance of an index, a combination of indices, a 'basket' of selected stocks (typically from an index or indices), or other factor or combination of factors; and
(c) if the performance in (b) is within specified limits, repayment of initial capital invested occurs but if not, the
customer could lose some or all of the initial capital invested.
101structured deposit
a
deposit paid on terms under which any interest or premium will be paid, or is at risk, according to a formula which involves the performance of:
(a) an index (or combination of indices) (other than money market indices);
(b) a stock (or combination of stocks); or
(c) a commodity (or combination of commodities).
subsidiary
2(2) (in relation to
MiFID business) a subsidiary undertaking as defined in Articles 1 and 2 of Seventh Council Directive on consolidated accounts (No. 83/349/EEC), including any subsidiary of a subsidiary undertaking of an ultimate
parent undertaking.
12[Note: article 4 (1)(29) of
MiFID]
12 subsidiary undertaking
(2) (for the purposes of determining whether a
person has
close links with another
person) (in accordance with section 343(8) of the
Act (Information given by auditor or actuary to the FSA) and paragraph 3(3) of Schedule 6 to the
Act (Threshold conditions)):
(b) an
undertaking ("S") if:
(ii) a majority of S's board of directors who have held office during the financial year and during the preceding financial year have been appointed solely as a result of the exercise of the parent's voting rights; and
(iii) no one else is the parent undertaking of S under any of (a) (i) to (iii) or b(i) or (ii) in the definition of
parent undertaking.
2substantial shareholder
70, 33(in
LR) any
person who is entitled to exercise or to control the exercise of 10% or more of the votes able to be cast on all or substantially all matters at general meetings of the
company (or of any
company which is its
subsidiary undertaking or
parent undertaking or of a fellow
subsidiary undertaking of its
parent undertaking). Disregard for this purpose any voting rights which such a
person exercises (or controls the exercise of) independently in its capacity as bare trustee, investment manager, collective investment undertaking or a
long term insurer in respect of its linked long term business if no
associate of that
person interferes by giving direct or indirect instructions, or in any other way, in the exercise of such voting rights (except to the extent any such
person confers or collaborates with such an
associate which also acts in its capacity as investment manager, collective investment undertaking or long term insurer).
70 suitability report
12, a report which a
firm must provide to its
client under
COBS 9.438 (Suitability reports) which, among other things, explains why the
firm has concluded that a recommended transaction is suitable for the
client.
supervisory formula method
Supervisory Liquidity Review Process
9the
FSA's assessment of the adequacy of certain
firms' liquidity resources as described in BIPRU 12.2 and BIPRU 12.5.
supervisory notice
(as defined in section 395(13) of the
Act (The Authority's procedures)) a notice given by the
FSA in accordance with section 53(4), (7) or (8)(b); 78(2) or (5); 197(3), (6) or (7)(b); 259(3), (8) or (9)(b); 268(3), (7)(a) or (9)(a) (as a result of subsection (8)(b)); 282(3), (6) or (7)(b); or 321(2) or (5).
2supervisory review and evaluation process
supervisory volatility adjustments approach
7the approach to calculating volatility adjustments under the
financial collateral comprehensive method under which the
firm uses the adjustments specified in
BIPRU 5.4 (Financial collateral) rather than in its own estimates, as more fully described in
BIPRU 5.4 and including that approach as applied to master netting agreements as described in BIPRU 5.6 (Master netting agreements).
supplementary listing particulars
(in
LR) (in accordance with section 81(1) of the
Act), supplementary listing particulars containing details of the change or new matter.
33supplementary prospectus
(in
Part 6 rules) a supplementary prospectus containing details of a new factor, mistake or inaccuracy.
33suretyship
(in relation to a
class of
contract of insurance) the
class of
contract of insurance, specified in paragraph 15 of Part I of Schedule 1 to the
Regulated Activities Order (Contracts of general insurance), namely:
(a) a
contract of insurance against the risks of loss to the
person insured arising from their having to perform contracts of guarantee entered into by them;
(b) fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee where these are:
(i) effected or carried out by a
person not carrying on a banking business;
(ii) not effected merely incidentally to some other business carried on by the
person effecting them; and
(iii) effected in return for the payment of one or more premiums.
2surrender value
(a) where the contract is a contract of life assurance or a contract for an annuity, the amount (including a nil amount) payable by the
firm or other body issuing the contract on surrender of the
policy;
(d) where the contract is for any other matter, the amount payable by the
firm on the surrender of the
policy.
2swap
7a transaction in which two counterparties agree to exchange streams of payments over time according to a predetermined basis or a
contract for differences.
Swiss general insurance company
(in accordance with article 1(2) of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 201/2507)) a
person:
(a) whose head office is in Switzerland;
(b) who is authorised by the supervisory authority in Switzerland as mentioned in article 7.1 of the
Swiss Treaty Agreement; and
Swiss Treaty Agreement
the agreement of 10 October 1989 between the European Economic Community and the Swiss Confederation on direct insurance other than life insurance, approved on behalf of the European Economic Community by the Council Decision of 20 June 1999 (No 91/370/EEC).
2synthetic cash
a position in a
derivative that offsets an exposure in property to the point where that exposure has effectively been neutralised, and the effect of the combined holding of both property and the position in the
derivative is the same as if the
authorised fund had received or stood to receive the value of the property in cash.
2synthetic future
(a) a synthetic bought future, that is, a bought call
option coupled with a written put
option; or
(b) a synthetic sold future, that is, a bought put
option coupled with a written call
option;
provided that in either case the two
options:
(ii) relate to the same underlying
security or other asset;
(iii) give the purchasers of the
options the same rights of exercise (whether at the same price or not); and
(iv) will expire together, if not exercised.
2synthetic risk and reward indicator
SYSC
the part of the
Handbook in High Level Standards which has the title Senior Management Arrangements, Systems and Controls.
2systems and controls function
Glossary - S
