Article 2 Interpretation

In this Order—

• “capital requirements directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26th June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49EC^f1;

• “Common Equity Tier 1 capital” has the meaning given by Article 50 of the capital requirements regulation;

• “consolidated basis” has the meaning given by Article 4(1)(48) of the capital requirements regulation;

• “cost benefit analysis” means—

  1. (a)

     an analysis of the costs and benefits of any change in rules made pursuant to Part 9A of the Financial Services and Markets Act 2000^f2 to give effect to a subsequent direction; and

  2. (b)

     where the costs and benefits can reasonably be estimated and it is reasonably practicable to produce an estimate, an estimate of those costs and of those benefits;

• “countercyclical capital buffer rate” has the meaning given in Article 128(7) of the capital requirements directive;

• “Financial Policy Committee” has the meaning given by section 9B of the Bank of England Act 1998^f3;

• “G-SII” means a global systemically important institution, as identified by the PRA pursuant to Part 4 of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014^f4;

• “G-SII additional leverage ratio” means a leverage ratio calculated by reference to the rate of the G-SII buffer which the PRA requires a G-SII to maintain;

• “G-SII buffer” has the meaning given by Article 128(3) of the Capital Requirements Directive;

• “individual basis” in relation to a macro-prudential measure applicable to an institution, means the application of that measure in respect of that institution only;

• “investment firm” has the meaning given by section 424A of the Financial Services and Markets Act 2000;

• “leverage ratio” means an institution’s Tier 1 capital divided by its total exposure measure, with this ratio expressed as a percentage;

• “PRA” means the Prudential Regulation Authority;

• “PRA-authorised person” has the meaning given by section 2B of the Financial Services and Markets Act 2000^f5;

• “SRB institution” has the meaning given by regulation 34D of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014^f6;

• “SRB institution additional leverage ratio” means a leverage ratio calculated by reference to the rate of the systemic risk buffers which the PRA requires an SRB institution to maintain pursuant to Part 5A of the Capital Requirements (Capital Buffers and Macro-prudential Measure) Regulations 2014^f7;

• “systemic risk buffer” has the meaning given by regulation 2 of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014^f8;

• “Tier 1 capital” has the meaning given by Article 25 of the capital requirements regulation;

• “total exposure measure” has the meaning given by Article 429 (4) of the Capital Requirements Regulation;

• “UK bank” means a UK institution which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits, but excludes—

  1. (a)

     a credit union within the meaning of section 31 of the Credit Unions Act 1979^f9, or

  2. (b)

     a person with permission under Part 4A of the Financial Services and Markets Act 2000^f10 to effect or carry out contracts of insurance as principal;

• “UK institution” means an institution which is established in the United Kingdom and is incorporated, or formed under the law of any part of the United Kingdom; and

• “UK investment firm” means a UK institution which—

  1. (a)

     has permission under Part 4A of the Financial Services and Markets Act 2000;

  2. (b)

     is a PRA-authorised person by virtue of a designation under article 3 of the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013^f11; and

  3. (c)

     is an investment firm.