2.5.7 Requirements Relating to Preference Shares, Unsecured Loans and Others for General Trading Members

Past version: Effective from 01 Apr 2014 to 28 Dec 2014

The following additional financial requirements apply to General Trading Members:

(a) a General Trading Member that holds a licence to engage in a Regulated Activity shall comply with the obligations under the Financial and Margin Regulations relating to the issue of any preference share and redemption of any redeemable preference share, drawing down and repayment in part or in full of any Qualifying Subordinated Loan principal, making of any unsecured loan or advance, payment of any dividend or director's fees or increase in any director's remuneration, with the additional condition that in relation to the redemption of any redeemable preference share, repayment in part or in full of any Qualifying Subordinated Loan principal, making of any unsecured loan or advance, payment of any dividend or director's fees or increase in any director's remuneration, a General Trading Member shall ensure that the sum of its Financial Resources or Adjusted Net Head Office Funds, as the case may be, and Qualifying Letters of Credit referred to in Rule 2.5.5, are more than 150% of its Total Risk Requirement; and
(b) a General Trading Member that holds a licence to engage in a Regulated Activity shall not reduce its paid-up ordinary share capital without the prior written approval of the Exchange.
(c) A General Trading Member that holds a licence specified in Rule 2.4.1(b) shall notify the Exchange immediately of any action taken that has or may have a financial or capital impact on the General Trading Member and required to be reported to the Relevant Regulatory Authority, or in relation to the events set out in (a) and (b).

Amended on 25 August 200925 August 2009 and 1 April 20141 April 2014.