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  • CA-3.1 CA-3.1 Expenditure Requirement

    • CA-3.1.1

      The Expenditure Requirement is equal to one quarter of the relevant annual expenditure.

    • CA-3.1.2

      Except in instances noted under Paragraph CA-3.1.2A, relevant annual expenditure equals the total annual expenditure (based on audited financial statements) less those items of expenditure that could be reduced or eliminated within a short period of time if required. Subject to prior CBB written approval, exceptional items of expenditure may also be excluded.

      Amended: April 2011
      Amended: January 2007

    • CA-3.1.2A

      For newly established investment firm licensees, for the first year of operations, the total annual expenditure is based on the projected annual expenditure figure for the first year as stated in the business plan submitted during the authorisation stage in accordance with Paragraph AU-5.1.6.

      Added: April 2011

    • CA-3.1.3

      Items that could be reduced or eliminated within a short period for the purposes of Rule CA-3.1.2 are:

      (a) Bonuses paid out of the relevant year's profits which have not been guaranteed;
      (b) Profit shares and other appropriations of profit, except for fixed or guaranteed remuneration which is payable even if the investment firm licensee makes a loss for the year;
      (c) Paid commissions shared, other than to employees or Directors of the investment firm licensee;
      (d) Fees, brokerage and other charges paid to clearing houses, clearing firms, exchanges, and intermediate brokers for the purposes of executing, registering or clearing transactions;
      (e) Interest payable to counterparties; and
      (f) Interest payable on borrowings to finance the investment firm licensee's investment firm and associated firm.
      Amended: October 2013
      Amended: January 2007