Finance Act 2011

70 (1) In this Schedule— U.K.

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not it is legally enforceable);

• “asset management activities” is defined in paragraph 71;

• “assets” is defined in paragraph 14;

• “banking group” is defined in paragraph 12;

• “the bank levy” is defined in paragraph 1;

• “building society” means a building society within the meaning of the Building Societies Act 1986;

• “building society group” is defined in paragraph 9;

• “capital resources condition” is defined in paragraph 72;

• “the chargeable period” is defined in paragraph 4(1) or 5(1) (as the case may be);

• [F1 “Commission Regulation 2015/61” means Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement for Credit Institutions;]

• “company” has the meaning given by section 1121(1) of CTA 2010;

• “contract of insurance” has the meaning given by article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ( S.I. 2001/544);

• [F2 “designated FPE entity” is defined in paragraph 15F(2);]

• “entity” includes a company, a partnership or a joint venture, but not—

  (a)

  the Crown,

  (b)

  a Minister of the Crown,

  (c)

  a government department,

  (d)

  a Northern Ireland department,

  (e)

  a foreign sovereign power, or

  (f)

  an international organisation;

• [F3 “entity-by-entity election” is defined in paragraph 15L(1);]

• “equity” is defined in paragraph 14;

• “excluded”, in relation to equity and liabilities, is defined in paragraph 28;

• “excluded entity” is defined in paragraph 73;

• “exempt activities condition” is defined in paragraph 13;

• “fair value”, in relation to an item, means the amount for which the item could be exchanged between knowledgeable, willing parties in an arm's length transaction;

• [F4 “the FCA Handbook” means the Handbook made by the Financial Conduct Authority under FISMA 2000 (as that Handbook has effect from time to time);”;]

• [F5 “FCA investment firm” has the meaning given by section 143A of FISMA 2000;]

• “foreign banking group” is defined in paragraph 10;

• F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F7 “high quality liquid asset”, in relation to an entity or group of entities, means an asset (within the meaning of this Schedule) which—

  (a)

  is a liquid asset to which Article 416 of Regulation ( EU ) No 575/2013 of the European Parliament and the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms applies, and

  (b)

  falls within the description of “level 1 assets” given by Article 10(1) of Commission Regulation 2015/61;]

• “international accounting standards” has the meaning given by section 1127(5) of CTA 2010, including any modifications mentioned in section 1127(6);

• “international organisation” means an organisation of which—

  (a)

  two or more sovereign powers are members, or

  (b)

  the governments of two or more sovereign powers are members,

  (see also sub-paragraph (5));

• [F8 “investment bank” has the meaning given by sub-paragraph (1A);]

• “liabilities” is defined in paragraph 14;

• “long term”, in relation to equity and liabilities, is defined in paragraphs 74 to 77;

• [F9 “non-UK allocated equity and liabilities” is defined in paragraph 15Z1;]

• “the parent entity” is defined in paragraph 4(1);

• “partnership” includes—

  (a)

  a limited liability partnership, and

  (b)

  an entity established under the law of a territory outside the United Kingdom of a similar character to a partnership,

  and “member”, in relation to a partnership, is to be read accordingly;

• “period of account”, in relation to an entity, means a period for which the entity prepares financial statements (consolidated or otherwise), (see also paragraph 41);

• “permanent establishment” is to be read in accordance with Chapter 2 of Part 24 of CTA 2010;

• [F10 “the PRA [F11 Rulebook]” means the [F11 Rulebook] made by the Prudential Regulation Authority under FISMA 2000 (as that [F11 Rulebook] has effect from time to time);]

• “the relevant entity” is defined in paragraph 5(1);

• “relevant foreign bank” is defined in paragraph 78;

• “the relevant group” is defined in paragraph 4(1);

• “relevant non-banking group” is defined in paragraph 11;

• “relevant regulated activity” is defined in paragraph 79;

• F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F13 “residual UK-sub-group” is defined in paragraph 15K(2);]

• “short term”, in relation to liabilities, means any liabilities which are not long term;

• “UK allocated equity and liabilities” is defined in paragraph 24;

• [F14 “UK-based equity and liabilities”—

  (a)

  in relation to a UK resident entity, other than a designated FPE entity, is defined in paragraph 15H,

  (b)

  in relation to a designated FPE entity (other than a member of a UK sub-group) is defined in paragraphs 15I and 15Z1, and

  (c)

  in relation to a UK sub-group, is defined in paragraphs 15J, 15K and 15L;]

• F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “UK resident bank” is defined in paragraph 80;

• “UK resident entity” means an entity which is resident in the United Kingdom (see paragraph 45) and “non-UK resident entity” is to be read accordingly;

• “UK sub-group” is defined in [F16 paragraph 15B];

• F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F18 (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—

  (a)

  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

  (b)

  meets all the following conditions—

  (i)

  it does not hold client monies or securities;

  (ii)

  it undertakes only dealing on own account;

  (iii)

  it has no external customers; and

  (iv)

  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—

  (a)

  dealing on own account; or

  (b)

  underwriting of financial instruments or placing of financial instruments on a firm commitment basis;

• “local firm” means a firm—

  (a)

  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

  (b)

  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—

  (a)

  the firm only holds financial instruments for its own account as a result of its failure to match investors’ orders precisely;

  (b)

  the total market value of all such positions is no more than 15% of the firm’s initial capital;

  (c)

  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.]

(2) In this Schedule the following terms have the meaning given in the [F19 PRA [F20 Rulebook]] —

• “authorised corporate director”;

• F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “capital resources requirement”;

• “contracts for differences”;

• “discretionary investment manager”;

• F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “ILAS BIPRU firm”;

• “designated multilateral development bank”;

• “pension scheme”;

• “principal”;

• “retail client”.

[F22 (2A) In this Schedule the following terms have the meaning given in the FCA Handbook—

• [F23 “commodity and emission allowance dealer”;

• “dealing on own account”;

• “financial instrument”;

• “initial capital”;

• “investment firm”;

• “market value”;

• “permanent minimum capital requirement”.]

(3) A entity which would be [F24 an FCA investment firm that meets the conditions in sub-paragraph (1B)] by virtue of activities carried on in the United Kingdom but for the fact that its registered office (or, if it does not have a registered office, its head office) is not in the United Kingdom is to be treated as being one.

F25 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) If, in any proceedings, any question arises whether a person is an international organisation for the purposes of the definition of “entity” in sub-paragraph (1), a certificate issued by or under the authority of the Secretary of State stating any fact relevant to that question is conclusive evidence of that fact.]

Textual Amendments

F1 Words in Sch. 19 para. 70(1) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Bank Levy (Amendment of Schedule 19 to the Finance Act 2011) Regulations 2016 (S.I. 2016/874), regs. 1(1), 4(1)(b)

F2 Words in Sch. 19 para. 70 inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(2)

F3 Words in Sch. 19 para. 70 inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(3)

F4 Words in Sch. 19 para. 70(1) inserted (1.1.2014 retrospective) by Finance (No. 2) Act 2015 (c. 33) , s. 20(3)(a) (8)

F5 Words in Sch. 19 para. 70(1) inserted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(2)(a)

F6 Words in Sch. 19 para. 70(1) omitted (1.4.2013) by virtue of The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636) , art. 1(2) , Sch. para. 15(6)(a)(i)

F7 Words in Sch. 19 para. 70(1) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Bank Levy (Amendment of Schedule 19 to the Finance Act 2011) Regulations 2016 (S.I. 2016/874), regs. 1(1), 4(1)(a)

F8 Words in Sch. 19 para. 70(1) substituted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(2)(b)

F9 Words in Sch. 19 para. 70 inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(4)

F10 Words in Sch. 19 para. 70(1) inserted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636) , art. 1(2) , Sch. para. 15(6)(a)(iii)

F11 Word in Sch. 19 para. 70(1) substituted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(2)(c)

F12 Words in Sch. 19 para. 70 omitted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 9 para. 14(8)

F13 Words in Sch. 19 para. 70 inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(5)

F14 Words in Sch. 19 para. 70 inserted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(6)

F15 Words in Sch. 19 para. 70 omitted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 9 para. 30(a)

F16 Words in Sch. 19 para. 70 substituted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by Finance Act 2018 (c. 3), Sch. 9 para. 14(7)

F17 Words in Sch. 19 para. 70 omitted (with effect in accordance with Sch. 9 para. 35 of the amending Act) by virtue of Finance Act 2018 (c. 3), Sch. 9 para. 30(b)

F18 Sch. 19 para. 70(1A)-(1D) inserted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(3)

F19 Words in Sch. 19 para. 70(2) substituted (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments) Order 2013 (S.I. 2013/636) , art. 1(2) , Sch. para. 15(6)(b)

F20 Word in Sch. 19 para. 70(2) substituted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(4)

F21 Words in Sch. 19 para. 70(2) omitted (1.1.2014 retrospective) by virtue of Finance (No. 2) Act 2015 (c. 33) , s. 20(3)(b) (8)

F22 Sch. 19 para. 70(2A) inserted (1.1.2014 retrospective) by Finance (No. 2) Act 2015 (c. 33) , s. 20(3)(c) (8)

F23 Word in Sch. 19 para. 70(2A) substituted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(5)

F24 Words in Sch. 19 para. 70(3) substituted (5.4.2022 with application in relation to any chargeable period ending on or after 1.1.2022) by The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations 2022 (S.I. 2022/286), regs. 1(2)(9), 15(6)

F25 Sch. 19 para. 70(4) omitted (with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Bank Levy (Amendment of Schedule 19 to the Finance Act 2011) Regulations 2016 (S.I. 2016/874), regs. 1(1), 4(2)