Capital returns

The FSA focus on capital returns has highlighted potential errors in the way capital has been created in firms and the use of hybrid capital from preference shares.  Have your Articles of Association been updated to take account of GENPRU?  Well the changes in January 2007 may already take preference shares out of the equation and the latest changes with effect from 31 December 2011 means that no new hybrid capital is allowed and new preference shares cannot be counted as tier 1 capital without signifcant changes to the Articles of Association.

These changes will require legal advice and competent steering through the complex rules.  Without this assistance your capital arrangements may be worthless and an FSA fine or worse still a breach of threshold conditions that could close the firm.


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