Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance) (c. 575)

PART THREE U.K. CAPITAL REQUIREMENTS

TITLE I U.K. GENERAL REQUIREMENTS, VALUATION AND REPORTING

CHAPTER 1 U.K. Required level of own funds

Section 2 U.K. Own funds requirements for investment firms with limited authorisation to provide investment services

Article 96 U.K. Own funds requirements for investment firms which hold initial capital as laid down in Article 28(2) of Directive 2013/36/EU

1. For the purposes of Article 92(3), the following categories of investment firm which hold initial capital in accordance with Article 28(2) of Directive 2013/36/EU shall use the calculation of the total risk exposure amount specified in paragraph 2 of this Article:

(a) investment firms that deal 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;

(b) investment firms that meet all the following conditions:

(i)

that do not hold client money or securities;

(ii)

that undertake only dealing on own account;

(iii)

that have no external customers;

(iv)

for which the execution and settlement whose transactions takes place under the responsibility of a clearing institution and are guaranteed by that clearing institution.

2. For investment firms referred to in paragraph 1, total risk exposure amount shall be calculated as the sum of the following:

(a) points (a) to (d) and (f) of Article 92(3) after applying Article 92(4);

(b) the amount referred to in Article 97 multiplied by 12,5.

3. Investment firms referred to in paragraph 1 are subject to all other provisions regarding operational risk laid down in Title VII, Chapter 3, Section II, Sub-section 1 of Directive 2013/36/EU.