12. Schedule 19 to the Finance Act 2011 (the bank levy) is amended as follows.
13. In paragraph 12 (definition of “banking group”)(1), in sub-paragraph (8)—
(a)in paragraph (a)(iv), for “an IFPRU 730k firm and a full scope IFPRU investment firm” substitute “an FCA investment firm that meets the conditions in paragraph 70(1B)”;
(b)in paragraph (b)(iv), for “an IFPRU 730k firm and a full scope IFPRU investment firm substitute “an FCA investment firm that meets the conditions in paragraph 70(1B)”.
14. In paragraph 30 (exclusion of “tier one capital equity and liabilities”)(2), in sub-paragraph (3)(c), for “PRA Handbook” substitute “the Handbook made by the Prudential Regulation Authority under FISMA 2000 (as that Handbook had effect from time to time)”.
15.—(1) Paragraph 70 (definitions)(3) is amended as follows.
(2) In sub-paragraph (1)—
(a)at the appropriate place insert—
““FCA investment firm” has the meaning given by section 143A of FISMA 2000;”;
(b)for the definition of “investment bank” substitute—
““investment bank” has the meaning given by sub-paragraph (1A);”;
(c)in the definition of “the PRA Handbook”, for “Handbook”, in each place, substitute “Rulebook”.
(3) After sub-paragraph (1) insert—
“(1A) In this Schedule, “investment bank” means an entity which—
(a)is an FCA investment firm that meets the conditions in sub-paragraph (1B), or
(b)is designated by the Prudential Regulation Authority under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013 (S.I. 2013/556) (dealing in investments as principal: designation by PRA).
(1B) An FCA investment firm meets the conditions in this sub-paragraph if it has a permanent minimum capital requirement of £750,000 and is not—
(a)a limited activity firm,
(b)a limited licence firm,
(c)a local firm, or
(d)a matched principal trading firm.
(1C) In sub-paragraph (1B)—
“limited activity firm” means an investment firm that—
deals on own account only for the purpose of fulfilling or executing a client order or for the purpose of gaining entrance to a clearing and settlement system or a recognised exchange when acting in an agency capacity or executing a client order; or
meets all the following conditions—
it does not hold client monies or securities;
it undertakes only dealing on own account;
it has no external customers; and
its execution and settlement transactions take place under the responsibility of a clearing institution and are guaranteed by that clearing institution;
“limited licence firm” means an investment firm that is not authorised to provide the investment services and activities of—
dealing on own account; or
underwriting of financial instruments or placing of financial instruments on a firm commitment basis;
“local firm” means a firm—
dealing on own account on markets in financial futures or options or other derivatives and on cash markets for the sole purpose of hedging positions on derivatives markets, or
dealing for the accounts of other members of those markets and being guaranteed by clearing members of the same markets, where responsibility for ensuring the performance of contracts entered into by such a firm is assumed by clearing members of the same markets;
“matched principal trading firm” means an investment firm that executes investors’ orders for financial instruments (including in the course of operating an organised trading facility) and meets the following conditions—
the firm only holds financial instruments for its own account as a result of its failure to match investors’ orders precisely;
the total market value of all such positions is no more than 15% of the firm’s initial capital;
such positions are incidental and provisional in nature and strictly limited to the time required to carry out the transaction in question.
(1D) In determining, for the purposes of sub-paragraph (1B), whether an FCA investment firm has a permanent minimum capital requirement of £750,000, any transitional provision in the FCA Handbook is to be disregarded.”.
(4) In sub-paragraph (2), for “Handbook” substitute “Rulebook”.
(5) In sub-paragraph (2A), for the list of terms substitute—
““commodity and emission allowance dealer”;
“dealing on own account”;
“financial instrument”;
“initial capital”;
“investment firm”;
“market value”;
“permanent minimum capital requirement”.”.
(6) In sub-paragraph (3), for “an IFPRU 730k firm and a full scope IFPRU investment firm” substitute “an FCA investment firm that meets the conditions in sub-paragraph (1B)”.
16.—(1) In paragraph 73 (meaning of “excluded entity”)(4) is amended as follows.
(2) In sub-paragraph (1)—
(a)omit paragraph (f);
(b)before paragraph (g) insert—
“(fa)a commodity and emission allowance dealer,”.
(3) In sub-paragraph (1A)(c), for “both an IFPRU 730k firm and a full scope IFPRU investment firm” substitute “an FCA investment firm that meets the conditions in paragraph 70(1B)”.
17. In paragraph 79 (meaning of “relevant regulated activity”), after paragraph (d) insert—
“(da)article 25DA (operating an organised trading facility), but only where dealing on own account in relation to sovereign debt instruments for which there is no liquid market (within the meaning of the FCA Handbook);”.
18. In paragraph 81 (powers to amend)(5), in sub-paragraph (1)(b), for “Handbook” substitute “Rulebook”.
Paragraph 12 was amended by paragraph 23 of Schedule 9(2) to the Finance Act 2018 and section 20 of the Finance (No. 2) Act 2015.
Paragraph 30 was amended by paragraph 9(2) of Schedule 26 to the Finance Act 2014 and paragraph 9 of Schedule 9(1) to the Finance Act 2018.
Paragraph 70 was amended by S.I. 2016/874, SI 2013/636, paragraphs 14(2) to 14(8) of Schedule 9(1) to the Finance Act 2018, paragraph 30 of Schedule 9(2) to the Finance Act 2018 and section 20(3) of the Finance (No. 2) Act 2015.
Paragraph 73(1) was amended by section 20(5) of the Finance (No. 2) Act 2015, paragraph 173 of Schedule 4(2) to the Co-operative and Community Benefit Societies Act 2014 (c. 14) and section 56(11) of the Finance Act 2016. Paragraph 73(1A) was inserted by section 56(12) of the Finance Act 2016. Paragraph 73(2) was amended by paragraph 246 of Schedule 16(3) to the Finance Act 2012 (c. 14). Paragraph 73(3) was amended by paragraph 33 of Schedule 9(2) to the Finance Act 2018.
Paragraph 81 was amended by S.I. 2013/636, paragraph 12 of Schedule 26 to the Finance Act 2014, paragraph 34 of Schedule 9(2) to the Finance Act 2018 and section 134(7) of the Finance Act 2021.