Prudential Regulation Authority Rulebook

4A.1

As far as compliance with the SCR is concerned, a firm must ensure that:

1. (1) Tier 1 own funds items account for at least 50% of the SCR;
2. (2) Tier 3 own funds items account for less than 15% of the SCR; and
3. (3) the sum of the amounts of Tier 2 own funds items and Tier 3 own funds items do not account for more than 50% of the SCR.

4A.2

As far as compliance with the MCR is concerned, a firm must ensure that:

1. (1) Tier 1 own funds items account for at least 80% of the MCR; and 
2. (2) Tier 2 basic own funds items do not account for more than 20% of the MCR.

4A.3

For the purposes of 4A.1(1) and 4A.2(1), the sum of the following basic own funds items must make up less than 20% of the total amount of Tier 1 own funds items:

1. (1) Tier 1 own funds items that display the features set out in 3B that are relevant for restricted Tier 1 own funds items; and
2. (2) items that are included in Tier 1 own funds under the transitional arrangement set out in Transitional Measures 4.1.  

4A.4

A firm must apply the quantitative limits set out in 4A to own funds items in respect of which it has received a classification of own funds permission.