CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

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FCA 2013/xx Financial strength Degree of overcollateralisation of trade Political and legal environment Strong Good Satisfactory Weak Country risk No country risk Limited exposure to country risk (in particular, offshore location of reserves in an emerging country) Mitigation of country risks Very strong mitigation: Strong mitigation: Exposure to country risk (in particular, offshore location of reserves in an emerging country) Acceptable mitigation: Strong exposure to country risk (in particular, inland reserves in an emerging country) Only partial mitigation: Strong offshore mechanisms Offshore mechanisms Offshore mechanisms No offshore mechanisms Strategic commodity Strategic commodity Less strategic commodity Non-strategic commodity 1 st class buyer Strong buyer Acceptable buyer Weak buyer Asset characteristics Liquidity and susceptibility to damage Commodity is quoted and can be hedged through futures or OTC instruments. Commodity is not susceptible to damage Commodity is quoted and can be hedged through OTC instruments. Commodity is not susceptible to damage Commodity is not quoted but is liquid. There is uncertainty about the possibility of hedging. Commodity is not susceptible to damage Commodity is not quoted. Liquidity is limited given the size and depth of the market. No appropriate hedging instruments. Commodity is susceptible to damage Strength of sponsor Page 117 of 197
FCA 2013/xx Financial strength of trader Track record, including ability to manage the logistic process Trading controls and hedging policies Quality of financial disclosure Security package Asset control Insurance against damages Very strong, relative to trading philosophy and risks Extensive experience with the type of transaction in question. Strong record of operating success and cost efficiency Strong standards for counterparty selection, hedging, and monitoring Strong Adequate Weak Sufficient experience with the type of transaction in question. Above average record of operating success and cost efficiency Adequate standards for counterparty selection, hedging, and monitoring Limited experience with the type of transaction in question. Average record of operating success and cost efficiency Past deals have experienced no or minor problems Limited or uncertain track record in general. Volatile costs and profits Trader has experienced significant losses on past deals Excellent Good Satisfactory Financial disclosure contains some uncertainties or is insufficient First perfected security interest provides the lender legal control of the assets at any time if needed Strong insurance coverage including collateral damages with top quality insurance companies First perfected security interest provides the lender legal control of the assets at any time if needed Satisfactory insurance coverage (not including collateral damages) with good quality At some point in the process, there is a rupture in the control of the assets by the lender. The rupture is mitigated by knowledge of the trade process or a third party undertaking as the case may be Fair insurance coverage (not including collateral damages) with acceptable quality insurance Contract leaves room for some risk of losing control over the assets. Recovery could be jeopardised Weak insurance coverage (not including collateral damages) or with weak quality Page 118 of 197
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Financial Conduct Authority Consult
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We are asking for comments on this
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CP13/6 CRD IV for Investment Firms
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CRD IV for Investment Firms CP13/6
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FCA 2013/xx Annex A Prudential sour
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FCA 2013/xx (a) (b) deal on own acc
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FCA 2013/xx 1.1.14 G A firm also fa
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FCA 2013/xx connected with, its reg
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FCA 2013/xx 2.1 Application 2.1.1 R
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FCA 2013/xx (a) (b) (c) the nature
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FCA 2013/xx losses because its inco
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FCA 2013/xx 2.2.18 R A firm must ha
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FCA 2013/xx [Note: article 83(3) of
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FCA 2013/xx (b) (c) sudden and seve
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FCA 2013/xx (b) provide the resolut
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FCA 2013/xx between each firm which
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FCA 2013/xx in a number of risk cat
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FCA 2013/xx Capital planning 2.2.73
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FCA 2013/xx approving and actioning
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FCA 2013/xx financial situations or
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FCA 2013/xx activities (IFPRU 2.2.1
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FCA 2013/xx suggested. 2.3.17 G The
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FCA 2013/xx (3) what plan is in pla
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FCA 2013/xx 2.3.35 G For a firm tha
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FCA 2013/xx that considers the poss
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FCA 2013/xx unexpected cash flows l
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FCA 2013/xx (1) a failure by a firm
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FCA 2013/xx single counterparty; (b
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FCA 2013/xx (4) that it has in plac
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FCA 2013/xx that firm. Calculation
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FCA 2013/xx 3.2.8 R A firm must dem
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FCA 2013/xx 126(2), 178(1)(b), 243(
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FCA 2013/xx (1) whether there is an
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FCA 2013/xx 4.3.8 G A significant I
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FCA 2013/xx set out but are outside
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FCA 2013/xx requirements in article
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Page 165 and 166: FCA 2013/xx Definition of default:
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Page 185 and 186: FCA 2013/xx Low default portfolios
Page 187 and 188: FCA 2013/xx Other requirements 4.3.
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FCA 2013/xx 3.2.6R enter into a con
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FCA 2013/xx group members in excess
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FCA 2013/xx FCA to grant a waiver t
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FCA 2013/xx consolidated basis cons
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FCA 2013/xx that is not excluded un
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FCA 2013/xx third country countercy
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FCA 2013/xx purpose of BIPRU 10 (La
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FCA 2013/xx (ii) any private or pub
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FCA 2013/xx EEA prudential sectoral
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FCA 2013/xx financial instrument (1
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FCA 2013/xx (2) (in accordance with
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FCA 2013/xx basis under Article 73(
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FCA 2013/xx (3) (in BIPRU 12 (Liqui
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FCA 2013/xx 2.3 (Supervisory review
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FCA 2013/xx Annex C Amendments to t
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FCA 2013/xx CAPITAL REQUIREMENTS DI
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FCA 2013/xx (b) has a branch in the
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FCA 2013/xx 1.3 Valuation … … P
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FCA 2013/xx … Calculation of the
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FCA 2013/xx The table in GENPRU 2.1
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FCA 2013/xx ... … 2.2.220R; GENPR
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FCA 2013/xx … Limits on the use o
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FCA 2013/xx Core tier one capital:
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FCA 2013/xx 6R consolidated supervi
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FCA 2013/xx 8.13 R … … IPRU(BSO
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FCA 2013/xx 8B.3 R The Royal Bank o
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FCA 2013/xx GENPRU 2.2.174R GENPRU
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FCA 2013/xx 1.1.5 G Guidance on the
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FCA 2013/xx … (da) (e) (f) apply
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FCA 2013/xx purpose of the 5% test
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FCA 2013/xx as it applies to the IR
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FCA 2013/xx applicable, the Banking
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FCA 2013/xx … 8.3.14 G The financ
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FCA 2013/xx GENPRU 2 Annex 6R requi
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FCA 2013/xx … 8.6 Consolidated ca
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FCA 2013/xx [deleted] 8.7.4 G BIPRU
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FCA 2013/xx apply differently for d
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FCA 2013/xx Part 1 (Non-EEA regulat
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FCA 2013/xx Disclosure: Operational
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FCA 2013/xx [Note: annex V paragrap
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FCA 2013/xx 86(11) (part) of CRD]
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FCA 2013/xx … 13.1.4 G Pursuant t
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FCA 2013/xx resources requirement i
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FCA 2013/xx Paragraph 22(2) of chap
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FCA 2013/XX Annex A Amendments to t
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FCA 2013/XX [deleted] … 4.2 Perso
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FCA 2013/XX [Note: article 91(9) of
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FCA 2013/XX 4.3A.5R to SYSC 4.3A.12
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FCA 2013/XX 7.1.18 R (1) A CRR firm
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FCA 2013/XX 12.4.-1R, BIPRU 12.4.5A
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FCA 2013/XX http://www.eba.europa.e
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FCA 2013/XX 19A.3.12 A 19A.3.12 B
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FCA 2013/XX 19A.3.29 R A firm must
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FCA 2013/XX … 19A.3.47 R (1) …
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FCA 2013/XX (b) (c) a firm's passpo
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FCA 2013/XX Remuneration policies m
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FCA 2013/XX 19C.3.1 R (1) A firm mu
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FCA 2013/XX Structured finance Lend
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FCA 2013/XX (b) in line with the ac
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FCA 2013/XX current and future risk
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FCA 2013/XX insurance to undermine
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FCA 2013/XX (1) is exceptional; (2)
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FCA 2013/XX component unless a subs
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[Note: article 91(3) of the CRD] FC
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PART A: INTRODUCTION & INTERPRETATI
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Table 1: Glossary of terms defined
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PART C: LEVELS PROCESS FOR DIVIDING
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solo Remuneration Code firm. (2) Wh
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Disapplication of certain remunerat
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(5) Sub-paragraph (6) applies where
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APPENDIX 1: SUPPLEMENTAL GUIDANCE O
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This document has no legal effect a
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GENERAL GUIDANCE ON PROPORTIONALITY
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PART A: INTRODUCTION & INTERPRETATI
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Table 1: Defined expression group G
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proportionality rule. Part-year Rem
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(d) The rule on guaranteed variable
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APPENDIX 1: PILLAR 3 DISCLOSURE REQ
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CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

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