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PRU-EPRS 1.18 Instructional Guidelines

Past version: effective from 16/12/2007 - 13/04/2013
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An Authorised Firm in Categories 2, 3 or 4 is drawn attention to the PIB section 2.5 which elaborately explains the calculation of Expenditure Based Capital Minimum. A thorough understanding of this section is a must for completing this form accurately.

Item No. Item Instructional Guidelines
B500_1100 Total expenses This figure should correspond to Form B30, sum of item nos. B300_1200, B300_2200, B300_3700, B300_3800 and B300_3900.
Deductions from total expenses (referPIB section 2.5).

However, note that the deductions should be entered as positive amounts. EPRS is configured to deduct the amount in the relevant calculations.
B500_1200 Staff bonuses All staff bonuses paid during the year except to the extent that they are non-discretionary.
B500_1300 Employees' and directors shares in profits All employees' and directors shares in profits except to the extent that they are non-discretionary.
B500_1400 Other appropriations of profits All such appropriations except to the extent that they are automatic. As per PIB Rule 2.5.2(2), a management charge should not be treated as an appropriation of profits.
B500_1500 Shared commissions payable Those commissions that would no longer be payable if business were to cease.
B500_1600 Interest charges in respect of borrowings made to finance the acquisition of realisable investments Interest that is paid in respect of borrowings made to finance the acquisition of the Authorised Firm's realisable investments
B500_1700 Interest paid to clients on client money balances Include here interest paid on Client Money balances.
B500_1800 Interest paid to counterparties Interest that is payable to counterparties in the Trading Book.
B500_1900 Fees, brokerage and other charges An Authorised Firm may exclude commissions shared with third parties other than employees, directors, half commission men or appointed representatives. Fees, brokerage and other charges paid for the purposes of executing, registering or clearing transactions may also be excluded.
B500_2000 Foreign exchange losses Losses arising from the translation of foreign currency balances may be excluded.
B500_2100 Contributions to charities The contribution that would no longer be paid if business were to cease.
B500_100T Total expenditure This item is calculated by EPRS as B50 item B500_1100 less the sum of items B500_1200 to B500_2100.
B500_3000 Fraction applied The applicable fractions depending on the nature of an Authorised Firm's operations are set out in PIB Rule 2.5.1.
B500_300T Expenditure based capital minimum (based on actual expenses) This item is calculated by EPRS by multiplying item B500_100T by 4 to annualise in the case of quarterly returns and by 1 in the case of annual returns and then multiplying by the fraction in cell B500_3000.
B500_4000 Expenditure based capital minimum (as notified to the firm) In this cell input the Expenditure Based Capital Minimum amount calculated as per the provisions of PIB section 2.5.

In particular, note that the amount in this cell should not be arrived at by applying the fraction in B500_3000 to the total expenses in cell B500_100T.

This cell should not be left blank as this is linked to one of the validations in EPRS (refer the validation page).
Derived from GM5/2007 (Made 16th December 2007). [VER1/12-07]