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PRU 2.2.18 Guidance for Form PIB 5 — Expenditure Based Capital Minimum

Instructional Guidelines

An Authorised Firm in Categories 2, 3 or 4 must complete this form in accordance with PIB Section 2.5.

Item No. Item Guidance
5.1 Total expenses This figure should correspond to Form PIB 3, Sum of Item Nos. 3.6 + 3.2 + 3.5 + 3.12 + 3.13 + 3.14 + 3.15
5.2 Staff bonuses All staff bonuses paid during the year except to the extent that they are non-discretionary.
5.3 Employees' and directors shares in profits All employees' and directors shares in profits except to the extent that they are non-discretionary.
5.4 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.
5.5 Shared commissions payable Those commissions that would no longer be payable if business were to cease.
5.6 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
5.7 Interest paid to clients on client money balances Include here interest paid on Client Money balances.
5.8 Interest paid to counterparties Interest that is payable to counterparties in the Trading Book.
5.9 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.
5.10 Foreign exchange losses Losses arising from the translation of foreign currency balances may be excluded.
5.11 Contributions to charities The contribution that would no longer be paid if business were to cease.
5.12 Total expenditure PIB 5 Item No. 5.1 less the Sum of PIB 5 Item Nos. 5.2 to 5.11.
5.13 Fraction applied As set out in PIB Rule 2.5.1 (a), (b) or (c).
5.14 Expenditure based capital minimum Use the expenditure based capital minimum amount calculated as per the provisions of Rules PIB 2.5.1, PIB 2.5.2 and PIB 2.5.3.