BKM502500 - Code population: definition of Investment Bank

FA11/SCH19/PARA70:

“investment bank” is defined as an entity which—

  • Is an FCA investment firm that meets the conditions in PARA70(1B) or
  • is designated by the PRA under article 3 of S.I. 2013/556.

An FCA investment firm that meets the conditions in PARA70(1B) is an investment firm that has a permanent minimum capital requirement of £750,000 and it is not -

  • a limited activity firm,
  • a limited licence firm,
  • a local firm, or
  • a matched principal trading firm.

These terms describe the type of regulated entity and the activities it can undertake.

An FCA investment firm that meets the conditions in PARA70(1B) has regulatory permissions that allow it to undertake the core activities of investment banking, namely dealing on own account, placing/underwriting financial instruments or (in some circumstances) operating an organised trading facility. However, these activities can also be carried out by investment firms that do not meet the definition of a UK resident bank or relevant foreign bank (see BKM502400 ). An entity may be let out because:

  • it is an excluded entity (see BKLM250000 and FA11/SCH19/PARA73);
  • it (and other relevant entities in the group) has a capital resource requirement of less than £100million (see BKLM243160 and FA11/SCH19/PARA72); or
  • its income is not derived wholly or mainly from these regulated activities (see BKLM243140 and FA11/SCH19/PARA80(1)(d)).

Where a company’s registered office (or, if it does not have a registered office, its head office) is not in the UK and but for this the company would, by virtue of activities carried on in the UK, be an FCA investment firm that meets the conditions in PARA70(1B), then, for bank levy purposes, it is treated as being an FCA investment firm that meets the conditions in PARA70(1B).

The PRA designated firms are investment firms with more than £15bn of assets. The Bank of England publishes a list of these firms on its website: https://www.bankofengland.co.uk/prudential-regulation/authorisations/which-firms-does-the-pra-regulate.