Regulation 15 Assets to be taken into account only to a specified extent

For regulation 32 of the 1994 Regulations (assets to be taken into account only to a specified extent) substitute—

“Assets to be taken into account only to a specified extent

32

(1)

Subject to paragraphs (5) to (7) below, the aggregate value of the assets of a society as determined in accordance with this Part of these Regulations shall, for any of the purposes for which this Part of these Regulations apply, be reduced by an amount representing the aggregate of—

(a)

the amount by which the society is exposed to assets of any description in excess of the permitted asset exposure limit for assets of that description;

(b)

the amount by which the society is exposed to a counterparty in excess of the permitted counterparty exposure limit for such counterparty;

(c)

the amount by which the society has an excess concentration with a number of counterparties;

(d)

the value of any assets transferred to or for the benefit of the society in pursuance of a condition in a derivative contract to which regulation 30 above does not apply or a related contract; and

(e)

the value of any assets transferred to or for the benefit of the society in pursuance of a contract whose effect is that of a derivative contract to which regulation 30 above does not apply or a related contract,

as determined in accordance with Schedule 5 to these Regulations.

(2)

Where a society is exposed to assets of any description in excess of the permitted asset exposure limit for such assets, the reduction required to be made by paragraph (1)(a) above shall be made—

(a)

by deducting (as far as possible) the amount of the excess from the assets of that description held by the society; and

(b)

where the society does not hold sufficient assets of that description to eliminate the excess (or does not hold any assets of that description) by making an appropriate deduction from the aggregate value of the assets which the society would otherwise be permitted to take into account for any of the purposes for which this Part of these Regulations applies.

(3)

Where a society is required to make a reduction in accordance with paragraph (1)(b), (c), (d) or (e) above, the reduction shall be made by making a deduction from the aggregate value of the assets which the society would otherwise be permitted to take into account for any of the purposes for which this Part of these Regulations applies.

(4)

Where a society carrying on long term business has attributed assets partly to a long term business fund and partly to its other assets, any reduction required to be made by this regulation shall be made in the same proportion as the attribution.

(5)

Assets of a society comprising—

(a)

approved securities or any interest accrued thereon;

(b)

debts to which regulation 23(3) applies;

(c)

rights to which regulation 23(4) applies;

(d)

debts in respect of premiums;

(e)

moneys due from, or guaranteed by, the government of any State which belongs to Zone A as defined in Council Directive 89/647/EEC of 18th December 1989 on a solvency ratio for credit institutions;

(f)

shares in or debts due or to become due from a dependant falling within regulation 21 above;

(g)

holdings in a scheme falling within Council Directive 85/611/EEC of 20th December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities; or

(h)

deferred acquisition costs

shall not be taken into account in any of the calculations described in paragraph (1) above.

(6)

Where a society has entered into any contracts providing for the payment of index linked benefits, the provisions of paragraph (1)(a) above shall not apply to assets of that society to the extent that they are held to match liabilities in respect of such benefits.

(7)

This regulation shall not apply to a registered friendly society to which neither section 37(2) nor (3) of the 1992 Act applies.”.