Prudential Regulation Authority Rulebook

6.1

This section applies to a firm if another member of its group intends to issue an item for inclusion within the basic own funds forming the own funds eligible for the group SCR of the firm’s group.

6.2

A firm must notify the PRA in writing of the intention of another member of its group which is not a firm to issue an item which it intends to include within the basic own funds forming the own funds eligible for the group SCR, as soon as it becomes aware of the intention of the issuing undertaking. When giving notice, a firm must:

1. (1) provide details of the amount of basic own funds to be raised through the intended issue and whether the item is intended to be issued to external investors or within its group;
2. (2) identify the classification of basic own funds the item is intended to fall within;
3. (3) include confirmation from the governing body of the firm that the item complies with the rules applicable to items of basic own funds included in the classification of the item identified in (2); and
4. (4) provide a copy of the term sheet and details of any features of the item it intends to include within the basic own funds forming the own funds eligible for the group SCR which are novel, unusual or different from an item of own funds of a similar nature previously issued by the firm or widely available in the market or not specifically contemplated by the Solvency II Firms Sector of the PRA Rulebook or the Solvency II Regulations.

6.3

A firm must provide a further written notification to the PRA including all the information required in 6.2 as soon as it proposes any change to the intended date of issue, amount of issue, type of investors, classification of a particular tier of basic own funds or any other feature of the item intended to be included as basic own funds to that previously notified to the PRA.

6.4

If an undertaking proposes to establish a debt securities program for the issue of an item which the firm intends to include within the basic own funds forming the own funds eligible for the group SCR, the firm must:

1. (1) notify the PRA of the establishment of the program; and
2. (2) provide the information required by 6.2

as soon it becomes aware of the proposed establishment. The PRA must be notified of any changes in accordance with 6.3.

6.5

The items of basic own funds to which 6.2 does not apply are:

1. (1) ordinary shares issued by an undertaking in the group which are:
1. (a) classified as Tier 1 own funds or Tier 2 basic own funds; and
2. (b) the same as ordinary shares previously issued by that undertaking;
2. (2) debt instruments issued from a debt securities program established by an undertaking in the group, provided that program was notified to the PRA prior to its first drawdown in accordance with 6.4; and
3. (3) any item which is not materially different in terms of its characteristics and eligibility for inclusion in a particular tier of basic own funds to items previously issued by the undertaking in the group and included in the basic own funds forming the own funds eligible for the group SCR.

6.6

A firm must notify the PRA in writing, no later than the date of issue, of the intention of the undertaking in the group to issue an item listed in 6.5 which it intends to include within the basic own funds forming the own funds eligible for the group SCR. When giving notice, a firm must:

1. (1) provide the information set out at 6.2(1) to (3); and
2. (2) confirm that the terms of the item have not changed since the previous issue of that type of item of basic own funds by that undertaking.