SCHEDULES

SCHEDULE 19U.K.The bank levy

Part 4U.K.Chargeable equity and liabilities

“Excluded” equity and liabilitiesU.K.

28(1)Equity or liabilities are “excluded” so far as they consist of equity or liabilities which are specified to be excluded—U.K.

(a)by any of paragraphs 29 to 39, or

(b)by an order made by the Treasury.

(2)The Treasury may also by order add to, repeal or otherwise amend any of paragraphs 29 to 39.

(3)An order under this paragraph may make consequential amendments of paragraph 76 (“long term” liabilities: non-protected deposits).

(4)An order under this paragraph may have retrospective effect in relation to—

(a)any chargeable period in which the order is made, or

(b)in the case of an order made on or before 31 December 2011, any chargeable period ending on or after 1 January 2011.

(5)Orders under this paragraph are to be made by statutory instrument.

(6)A statutory instrument containing an order under this paragraph may not be made unless a draft has been laid before, and approved by a resolution of, the House of Commons.

29(1)Liabilities representing protected deposits are excluded.U.K.

(2) A deposit is “protected” so far as it is covered by the Financial Services Compensation Scheme under section 213 of FISMA 2000 (“the FSCS”).

(3)A deposit is “protected” so far as it is covered by a scheme which—

(a)operates outside the United Kingdom, and

(b)is comparable to the FSCS.

(4)Sub-paragraph (5) applies for the purposes of sub-paragraphs (2) and (3) if—

(a) the entity holding the deposit (“the relevant deposit”) is required to pay, in relation to the scheme, levies for purposes mentioned in section 213(3)(b) of FISMA 2000 or purposes comparable to those purposes,

(b)those levies are calculated—

(i)by reference to a proportion (“X%”) of the total amount of all deposits held by the entity or all deposits held by the entity within a specified class within which the relevant deposit falls, or

(ii)by reference to another amount which is a proportion (“Y%”) of the total amount of all the scheme deposits held by the entity, and

(c)X% or (as the case may be) Y% exceeds the proportion (“Z%”) of the relevant deposit covered by the scheme.

(5)The scheme is treated—

(a)in a case within sub-paragraph (4)(b)(i), as covering X% of the relevant deposit (instead of Z%), and

(b)in a case within (4)(b)(ii), as covering Y% or, if smaller, 100% of the relevant deposit (instead of Z%).

(6) In sub-paragraph (4) “ scheme deposit ” means a deposit the whole or part of which is covered by the scheme (disregarding sub-paragraph (5)).

(7)A deposit is “protected” so far as it is covered by a guarantee—

(a)which is given explicitly by a national government (other than the government of the United Kingdom), and

(b)under which the government guarantees to compensate depositors for losses on their deposits.

(8) In sub-paragraph (2), and sub-paragraphs (4), (5) and (6) so far as relating to a scheme within sub-paragraph (2), “ deposit ” has the meaning given by article 5(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ( S.I. 2001/544).

(9) In sub-paragraphs (3) and (7), and sub-paragraphs (4), (5) and (6) so far as relating to a scheme within sub-paragraph (3), “ deposit ” has the meaning given by article 5(2) of that Order but ignoring the exclusions in articles 6 to 9AB.

(10)If two or all of sub-paragraphs (2), (3) and (7) apply to a deposit, the amount of the deposit “protected” is the highest amount which results from any one of those sub-paragraphs.

30(1)Equity and liabilities which are “tier one capital equity and liabilities” are excluded.U.K.

(2) “ Tier one capital equity and liabilities ” means, in relation to an entity or a group of entities, so much of the entity or group's equity and liabilities as—

(a)is tier one capital before deductions for the purposes of the [F1PRA Handbook], or

(b)would be treated as tier one capital before deductions for those purposes were the tier one capital before deductions of the entity or group as at the end of the chargeable period to be determined under that Handbook.

31(1)Sovereign repo liabilities are excluded.U.K.

(2) “ Sovereign repo liability ” means a liability of a person (“A”) which represents a sum of money or other asset received by A from another person (“B”) under an arrangement where—

(a)under the arrangement A sells high quality securities at any time to B,

(b)the arrangement makes provision conferring a right or imposing an obligation on A to buy those or similar securities at any subsequent time, and

(c)the subsequent buying of those or similar securities would extinguish the liability.

(3)Section 556 of CTA 2009 (meaning of securities and similar securities) applies for the purposes of sub-paragraph (2) as it applies for the purposes of Chapter 10 of Part 6 of that Act.

(4)Securities are “high quality” if—

(a)they are debt securities issued by entities within section BIPRU 12.7.3(1) or (2) of the [F2PRA Handbook] which meet the requirements of section BIPRU 12.7.4(1) and (2), or

(b)they are issued by a designated multilateral development bank.

“ Debt securities ” has the same meaning as that term has in section BIPRU 12.7.3 of the [F2 PRA Handbook ] .

32(1)Sovereign stock-lending liabilities are excluded.U.K.

(2) “ Sovereign stock-lending liabilities ” means liabilities of the lender to redeliver equivalent cash collateral under a stock lending arrangement in respect of high quality securities.

(3) Section 805 of CTA 2010 (“stock lending arrangement”) applies for the purposes of sub-paragraph (2) as it applies for the purposes of Chapter 5 of Part 17 of that Act, and the reference in sub-paragraph (2) to “ the lender ” is to be construed accordingly.

(4)Paragraph 31(3) and (4) apply for the purposes of this paragraph.

33(1)Relevant insurance liabilities are excluded.U.K.

(2) “ Relevant insurance liabilities ” means liabilities of a regulated insurer carrying on an insurance business which are—

(a)liabilities to policyholders under contracts of general insurance or contracts of long-term insurance, including such contracts effected or carried out outside the United Kingdom,

(b)liabilities representing unallocated surpluses, or

(c)liabilities representing participants' interests in collective investment schemes.

(3)The liabilities of a regulated insurer within sub-paragraph (2)(c) include a liability which would be a liability of the insurer within that provision if the insurer prepared consolidated financial statements.

(4)In this paragraph—

• “ collective investment scheme ” has the same meaning as in Part 17 of FISMA 2000 (see sections 235 and 237 of that Act);

• “ contract of general insurance ” means a contract of a type described in Part 1 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ( S.I. 2001/544);

• “ contract of long-term insurance ” means a contract of a type described in Part 2 of that Schedule;

• “ regulated insurer ” means an entity which—

  (a)

  is authorised under the law of any territory to carry on insurance business, or

  (b)

  is a member of a body or organisation which is so authorised;

• “ unallocated surplus ” means the fund for future appropriations shown in line 15 of Form 3 of a return deposited with the [F3 Prudential Regulation Authority ] under section 9.6 of the Interim Prudential Sourcebook for Insurers made by that Authority under FISMA 2000.

34(1)Relevant property, plant and equipment reserves are excluded.U.K.

(2) “ Relevant property, plant and equipment reserves ” means equity amounts representing revaluation reserves relating to the revaluation of property, plant and equipment under International Accounting Standard 16 or Financial Reporting Standard 15.

(3) “ Property, plant and equipment ” has the meaning given, for the time being, by International Accounting Standard 16.

35(1)Relevant tax liabilities are excluded.U.K.

(2) In relation to liabilities to be determined by reference to amounts recognised, or which would have been recognised, in consolidated financial statements or financial statements prepared under international accounting standards, “ relevant tax liabilities ” means liabilities representing—

(a)current tax or deferred tax liabilities within the meaning, for the time being, of International Accounting Standard 12, or

(b)an amount of the bank levy.

(3)In relation to liabilities to be determined by reference to amounts recognised, or which would have been recognised, in consolidated financial statements or financial statements prepared under UK GAAP, “relevant tax liabilities” means liabilities representing—

(a)current tax or deferred tax within the meaning, for the time being, of Financial Reporting Standard 16 or 19, or

(b)an amount of the bank levy.

36(1)Relevant retirement benefit liabilities are excluded.U.K.

(2) In relation to liabilities to be determined by reference to amounts recognised, or which would have been recognised, in consolidated financial statements or financial statements prepared under international accounting standards, “ relevant retirement benefit liabilities ” means liabilities under defined benefit plans within the meaning, for the time being, of International Accounting Standard 19.

(3)In relation to liabilities to be determined by reference to amounts recognised, or which would have been recognised, in consolidated financial statements or financial statements prepared under UK GAAP, “relevant retirement benefit liabilities” means liabilities under defined benefit schemes within the meaning, for the time being, of Financial Reporting Standard 17.

37(1)Financial services compensation scheme liabilities are excluded.U.K.

(2) “ Financial services compensation scheme liabilities ” means liabilities representing—

(a) levies payable by virtue of [F4 section 213(3)(b) ] of FISMA 2000, or

(b)levies payable for purposes comparable with those mentioned in [F4section 213(3)(b)] of that Act in relation to a scheme which—

(i)operates outside the United Kingdom, and

(ii)is comparable to the Financial Services Compensation Scheme under section 213 of that Act.

38(1)Liabilities representing clients' money held by an authorised person are excluded.U.K.

(2) “ Authorised person ” means an entity which—

(a) is an authorised person for the purposes of FISMA 2000 (see section 31 of that Act), or

(b) would be required to be such an authorised person if it were a UK resident entity which carried on its activities in the United Kingdom.

(3)“Clients' money”—

(a) in relation to an authorised person within sub-paragraph (2)(a), has the meaning given by [F5 section 137B of FISMA 2000 (FCA general rules: clients’ money, right to rescind etc. ) ] , and

(b)in relation to an authorised person within sub-paragraph (2)(b), means any money held by the person outside the United Kingdom where the holding of that money is subject to rules comparable with rules made under [F6section 137B of that Act],

but does not include a deposit within the meaning of article 5(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ( S.I. 2001/544) ignoring the exclusions in articles 6 to 9AB.

39(1)Currency liabilities are excluded.U.K.

(2) “ Currency liabilities ” means liabilities of an entity or a group of entities representing notes issued by the entity or a member of the group as currency.