Glossary of terms

-A-

Absolute FX exposure limit

(in ELM) the amount by which an ELMI's own funds exceed 2.5% of its e-money outstandings, calculated in accordance with ELM 3.4.6R (FX exposure limits).

Accounting Reference Date

(1) (except in COLL and CIS):

(a) (in relation to a company incorporated in the United Kingdom under the Companies Acts) the accounting reference date of that company determined in accordance with section 224 of the Companies Act 1985;

(b) (in relation to any other body) the last day of its financial year.

(2) (in COLL and CIS ): the date on which the annual accounting period of an authorised fund ends.

Accumulating

with-profits

policy

With-profits insurance contract which has a readily identifiable current benefit, whether or not this benefit is currently realisable, which is adjusted by an amount explicitly related to the amount of any premium payment and to which additional benefits are added in respect of participation in profits by additions directly related to the current benefit or a policy with similar characteristics.

Added to Loan

This phrase relates to the costs borrowers face when arranging a mortgage. Often these costs are added to the mortgage amount being borrowed hence the term. The costs may include items such as mortgage indemnity fees and/or arrangement fees and/or administration fees as examples.

Additional Security Fee

This is required when the mortgage exceeds a certain percentage of the value of the property (usually 75%). The form of additional security used is normally a Mortgage Indemnity Policy. Occasionally the lender may require a parent to be a guarantor or for other security such as shares or insurance policies to be pledged.

Additional Voluntary Contributions (AVCs)

(a) a voluntary contribution paid by a member of an occupational pension scheme under the terms of the scheme or of a separate contract;

(b) an additional contribution paid by a member of an occupational pension scheme to which his employer is not a contributor, under which additional benefits are provided to supplement the benefits under another occupational pension scheme of which he is also a member and to which his employer is a contributor.

Administration Fee

Some lenders charge this fee to cover their costs of administration and sourcing funds. This fee is not refundable if the mortgage application does not proceed. The administration fee may form part of the valuation fee and this part will not be refunded by the lender if the valuation does not proceed.

(in PR and LR 4) (as defined in the PD Regulation) announcements:

(a) relating to a specific offer to the public of securities or to an admission to trading on a regulated market; and

(b) aiming to specifically promote the potential subscription or acquisition of securities.

Adviser

An individual who is: a representative; or an appointed representative.

Affinity Card

A credit card issued by a member in conjunction with an organization or collective group (eg, a professional association or special interest group) that is identified on the card. The card issuer often pays the organization a royalty on charge transactions.

Alternative Trading System

A system that brings together multiple buying and selling interests in designated investments (other than life policies or stakeholder pension schemes or rights to trading system or interests in life policies or stakeholder pension schemes), in the system and according to non-discretionary rules set by the system's operator in a way that results in a contract but does not include:

(a) a system that is operated by an RIE or that is regulated market or an EEA commodities market; or

(b) a bilateral system.

Annual Accounting Period

(in CIS ) a period determined in accordance with CIS 9.2.1R (Accounting period);

(in COLL) the 12 month period stipulated in the prospectus which ends on the accounting reference date.

Annual Percentage Rate (APR)

The annual percentage rate of charge for a contract as calculated in accordance with MCOB 10 (Annual percentage rate).

Annuities

Income from capital investment paid in a series of regular payments; "his retirement fund was set up to be paid as an annuity"

Applicant

(1) (in LR) an issuer which is applying for admission of securities.

(2) (in PR) an applicant for approval of a prospectus or supplementary prospectus relating to transferable securities

Appointed

Actuary

An actuary appointed under (Appointment of an appropriate actuary).

Appointed representative

A firm or individual who is a party to a contract with an authorised person (his principal) which permits or requires him to carry on business of a description prescribed in the Appointed Representatives Regulations.

Appropriate Personal Pension

A personal pension policy or a personal pension contract under which contributions are made to a personal pension scheme which is an appropriate scheme under section 1(8) of the Social Security Act 1986 or article 3(8) of the Social Security (Northern Ireland) Order 1986.

Approve

(in relation to a financial promotion) approve the content of the financial promotion for the purposes of section 21 of the Act (Restrictions on financial promotion).

Approved Person

Person in relation to whom the FSA has given its approval under section 59 of the Act (Approval for particular arrangements) for the performance of a controlled function.

Arrangement Fee

Fee payable for making arrangements regarding mortgages

Arrears

Payments not paid on time

Assignment

Where an investment or policy is used to protect a loan. The lender has first charge (claim) over the investment or policy whilst it is assigned and not the owner.

Authorisation

Authorisation as an authorised person for the purposes of the FSMA 2000.

Authorised

Person

(in accordance with section 31 of the FSMA (Authorised persons)) one of the

following:

a person who has a Part IV permission to carry on one or more
regulated activities;
an incoming EEA firm;
an incoming Treaty firm;
a UCITS qualifier;
an ICVC;
the Society of Lloyd's.

(see also for the position of an authorised partnership or unincorporated association which is dissolved.)

-B-

Bearer Certificate

(in COLL and CIS) a certificate or other documentary evidence of title, for which provision is made in the instrument constituting the scheme, which indicates that:

the holder of the document is entitled to the units specified in it; and
no entry will be made on the register identifying the holder of those units.

Bid Price

The price at which a person could sell a unit in a dual-priced AUT or a security.

Broker Fund

(in relation to a fund for which the firm is or will be a broker fund adviser):

(a) an actual or notional fund of a long-term insurer or overseas long-term insurer, which contains or will contain contributions made or to be made by a client or clients of a firm in connection with a life policy or policies;

(b) a fund of a collective investment scheme, which contains or will contain cash contributions made or to be made by a client or clients of a firm in connection with the purchase of units in the scheme.

Business Day

(1) (in relation to anything done or to be done in (including to be submitted to a place in) any part of the United Kingdom):

(a) (except in REC ) any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in that part of the United Kingdom;

(b) (in REC ) (as defined in section 167 of the Companies Act 1989) any day which is not a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday in any part of the United Kingdom.

(2) (in relation to anything done or to be done by reference to a market outside the United Kingdom) any day on which that market is normally open for business.

Business Order

The Financial Services and Markets Act 2000 (Carrying on Regulated Activities

by Way of Business Order) 2001 (SI 2001/1177).

-C-

Capital Adequacy Directive

The Council Directive of 15 March 1993 on capital adequacy of investment firms and credit institutions (No 93/6/EEC).

Carry Back

The term used for the exercise of taking up unused pension relief from the previous tax year. It is recommended that advice is sought if carry back is being used, particularily where higher rates of tax are involved.

Carry Forward

Asset created from the value of tax losses incurred in previous years and available to be used in future periods to offset taxable income .

Cashback

(in MCOB) a cash amount paid by a mortgage lender to a customer (typically at the beginning of a contract) as an inducement to enter into a regulated mortgage contract with the mortgage lender.

Cash Deposit ISA

A cash component of an ISA which does not include the qualifying investments prescribed in paragraphs 8(2)(c), (d), (e) or (f) of the ISA Regulations.

CAT Standards

The CAT standards for ISAs prescribed by the Treasury on 22 December 1998.

Chinese Hedge

Communication barrier between financiers at a Firm (investment bankers) and traders. This barrier is erected to prevent the sharing of inside information that bankers are likely to have.

Chinese Wall

An arrangement that requires information held by a person in the course of carrying on one part of its business to be withheld from, or not to be used for, persons with or for whom it acts in the course of carrying on another part of its business.

Churning

Excessive trading of a client's account in order to increase the broker's commissions.

Clearing House

A clearing house through which transactions on an exchange may be cleared.

Client

(1) (except in ML; in PROF; in relation to a regulated mortgage contract) any person with or for whom a firm conducts or intends to conduct designated investment business or any other regulated activity; and:

(a) every client is a customer or a market counterparty;

(b) "client" includes:

(i) a potential client;

(ii) a client of an appointed representative of a firm with or for whom the appointed representative acts or intends to act in the course of business for which the firm has accepted responsibility under section 39 of the Act (Exemption of appointed representatives);

(iii) a collective investment scheme even if it does not have separate legal personality;

(iv) if a person ("C1"), with or for whom the firm is conducting or intends to conduct designated investment business, is acting as agent for another person ("C2"), either C1 or C2 in accordance with COB 4.1.5R (Agent as client);

(i) a trust beneficiary;

(ii) a corporate finance contact;

(iii) a venture capital contact.

(2) (in ML ) (in relation to a relevant firm) any person engaged in, or who has had contact with the relevant firm with a view to engaging in, any transaction with that relevant firm:

(a) on his own behalf; or

(b) as agent for or on behalf of another.

(3) (in PROF ) (as defined in section 328(8) of the Act (Directions in relation to the general prohibition)) (in relation to members of a profession providing financial services under Part XX of the Act (Provision of Financial Services by Members of the Professions)):

(a) a person who uses, has used or may be contemplating using, any of the services provided by the member of a profession in the course of carrying on exempt regulated activities (including, where the member of the profession is acting in his capacity as a trustee, a person who is, has been or may be a beneficiary of the trust); or

(b) a person who has rights or interests which are derived from, or otherwise attributable to, the use of any such services by other persons; or

(c) a person who has rights or interests which may be adversely affected by the use of any such services by persons acting on his behalf or in a fiduciary capacity in relation to him.

(4) (in relation to a regulated mortgage contract, except in ML and PROF) the individual or trustee who is the borrower or potential borrower under that contract.

Client Agreement

Terms of business which have been signed by the client or to which the client has consented in writing.

Client Money

(1) (in COB and CASS 2 to 4) subject to the client money rules, money of any currency which, in the course of carrying on designated investment business, a firm holds in respect of any investment agreement entered into, or to be entered into, with or for a client, or which a firm treats as client money in accordance with the client money rules.

(2) (in CASS 5) subject to the client money rules, money of any currency which, in the course of carrying on insurance mediation activity, a firm holds on behalf of a client or which a firm treats as client money in accordance with the client money rules;

(3) (in PRU 9):

(a) in relation to an insurance intermediary when acting as such, money which is client money in (2);

(b) in relation to a mortgage intermediary when acting as such, money of any currency which in the course of carrying on mortgage mediation activity, the firm holds on behalf of a client, either in a bank account or in the form of cash.

Close Links

(1) (except in (Auditors) and (Actuaries)) (in accordance with paragraph 3(2) of Schedule 6 to the Act (Close links)) the relationship between a person ("A") and another person ("CL") which exists if:

(a) CL is a parent undertaking of A; or

(b) CL is a subsidiary undertaking of A; or

(d) CL is a subsidiary undertaking of a parent undertaking of A; or

(e) CL owns or controls 20% or more of the voting rights or capital of A; or

(f) A owns or controls 20% or more of the voting rights or capital of CL.

(2) (in (Auditors) and (Actuaries)) (in accordance with section 343(8) of the Act (Information given by auditor or actuary to the Authority: persons with close links) the relationship in (1), disregarding (e) and (f).

Commission

Any form of commission or remuneration , including a benefit of any kind, offered or given in connection with :

(a) designated investment business (other than commission equivalent);

(b) insurance mediation activity in connection with a non-investment

insurance contract; or

provider.

Complaint

(in COAF) any expression of dissatisfaction about the manner in which the FSA has carried out its statutory functions other than its legislative functions.

Compulsory Jurisdiction

The jurisdiction of the Financial Ombudsman Service to which firms (and certain unauthorised persons as a result of the Ombudsman Transitional Order or section 226(2)(b) and (c) of the Act) are compulsorily subject.

Jurisdiction

Consultation Paper

Publications which invite comment by a specified period with regard to amendments to regulatory documents.

Contract for Differences

The investment, specified in article 85 of the Regulated Activities Order (Contracts for differences etc), which is rights under:

(a) a contract for differences; or

(b) any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in:

(i) the value or price of property of any description; or

(ii) an index or other factor designated for that purpose in the

contract.

Country of Origin

In relation to an electronic commerce activity, the EEA State in which the

establishment from which the service in question is provided is situated.

Custody

(in relation to clients' assets) safeguarding and administering investments.

Custody Rules

CASS 2

Custodian

(a) an approved bank;

(b) an approved depositary;

(d) a firm whose permitted activities include safeguarding and administering investments;

(e) a regulated clearing firm;

(f) where it is not feasible to use a custodian in (a) to (e), and there are reasonable grounds to show that a person outside the United Kingdom, whose business includes the provision of custodial services, is able to provide such services which are appropriate to the client and in the client's best interest to use, that person.

-D-

Dealing Day

(in COLL and CIS ) the period in a business day (in accordance with provisions of the prospectus) during which the ACD or the operator is open for business.

Debenture

The investment, specified in article 77 of the Regulated Activities Order (Instruments creating or acknowledging indebtedness), which is in summary:

any of the following which are not government and public securities:

(a) debentures;

(b) debenture stock;

(d) bonds;

(e) certificates of deposit;

(f) any other instrument creating or acknowledging indebtedness.

Decision Notice

A notice issued by the FSA in accordance with section 388 of the Act (Decision notices).

Defined Benefit Occupational Scheme

An occupational pension scheme which is not a defined contribution ccupational pension scheme.

Defined Benefits Pension Scheme

A pension policy or pension contract under which the only money-purchase benefits are benefits ancillary to other benefits which are not money-purchase benefits

Defined Contribution Occupational Pension Scheme

An occupational pension scheme into which a firm, as employer, pays regular fixed contributions and will have no legal or constructive obligation to pay further contributions if the scheme does not have sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

Delta

The relationship between an option's price and the price of the underlying stock or futures contract.

Also called the 'hedge ratio'. For a call option, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50. As options near expiration, in-the-money call option contracts approach a delta of 1.0, while in-the-money put options approach a delta of -1.

Deposit-taking Firm

A firm which is a bank, building society or credit union.

Depositary

(1) (except in LR):

(a) (in relation to an ICVC) the person to whom is entrusted the safekeeping of all of the scheme property of the ICVC and who has been appointed for this purpose in accordance with regulation 5 (Safekeeping of scheme property by depositary) of and Schedule 1 (Depositaries) to the OEIC Regulations;

(b) (in relation to an AUT) the trustee;

(c) (in relation to any other unit trust scheme) the person holding the property of the scheme on trust for the participants;

(d) (in relation to any other collective investment scheme) any person to whom the property subject to the scheme is entrusted for safekeeping.

(2) (in LR) a person that issues certificates representing certain securities that

have been admitted to listing or are the subject of an application for admission to listing.

Derivative

A contract for differences, a future or an option. (see also securitised

derivative.)

Designated Investment Exchange

Any of the following investment exchanges: American Stock Exchange Australian Stock Exchange Bermuda Stock Exchange Bolsa Mexicana de Valores Bourse de Montreal Inc Channel Islands Stock Exchange Chicago Board of Trade Chicago Board Options Exchange Chicago Stock Exchange Coffee, Sugar and Cocoa Exchange, Inc Euronext Amsterdam Commodities Market Hong Kong Exchanges and Clearing Limited International Securities Market Association Johannesburg Stock Exchange Kansas City Board of Trade Korea Stock Exchange Mid-America Commodity Exchange Minneapolis Grain Exchange New York Cotton Exchange New York Futures Exchange New York Stock Exchange New Zealand Stock Exchange Osaka Securities Exchange Pacific Exchange Philadelphia Stock Exchange Singapore Exchange South African Futures Exchange Tokyo International Financial Futures Exchange Tokyo Stock Exchange Toronto Stock Exchange.

Designated Professional Body

A professional body designated by the Treasury under section 326 of the Act (Designation of professional bodies) for the purposes of Part XX of the Act (Provision of Financial Services by Members of the Professions); as at 21 June 2001 the following professional bodies have been designated in the Financial Services and Markets Act 2000 (Designated Professional Bodies) Order 2001 (SI 2001/1226):

(a) The Law Society (England and Wales);

(b) The Law Society of Scotland;

(d) The Institute of Chartered Accountants in England and Wales;

(e) The Institute of Chartered Accountants of Scotland;

(f) The Institute of Chartered Accountants in Ireland;

(g) The Association of Chartered Certified Accountants;

(h) The Institute of Actuaries.

Direct Offer Financial Promotion

A financial promotion which:

(a) contains:

(i) an offer by the firm or another person to enter into a controlled agreement with anyone who responds to the financial promotion; or

(ii) an invitation to anyone who responds to the financial promotion to make an offer to the firm or another person to enter into a controlled agreement;

(b) specifies the manner of response or includes a form in which any response is to be made (for example by providing a tear-off slip); and

Discussion Paper

Publications which encourage discussion and feedback by a specified period. Not necessarily resulting in amendments to regulatory documents.

Domestic ECA Provider

A firm which provides an electronic commerce activity, from an establishment

which it has in the United Kingdom, with or for a UK ECA recipient or an ECA

recipient in a non-EEA State.

Drawdown Mortgage

A lifetime mortgage contract where:

(a) the amount borrowed is paid by the mortgage lender to the customer in instalments during the life of the mortgage; and

(b) the size and frequency of the instalments are:

(1) agreed between the mortgage lender and the customer; or

(2) set by reference to an index or interest rate (such as the Bank of England repo rate).

Durable Medium

(a) paper; or

(b) (in accordance with article 2(f) of the Distance Marketing Directive and article 2(12) of the Insurance Mediation Directive) any instrument which enables the recipient to store information in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored; this includes, in particular, floppy disks, CD-ROMs, DVDs and the hard drive of the recipient's computer on which electronic mail is stored, but not Internet websites unless they fulfil the criteria in this definition.

-E-

Early Repayment Charge

(in MCOB) a charge levied by the mortgage lender on the customer in the event

that the amount of the loan is repaid in full or in part before a date specified in

the contract.

ECA Recipient

A person who is a user of an electronic commerce activity.

EEA

The European Economic Area.

Electronic Commerce Activity

An activity which:

(a) consists of the provision of an information society service from an establishment in an EEA State; and

(b) is, or but for article 72A (Information society services) of the Regulated Activities Order (Information society services) (and irrespective of the effect of article 72 of that Order (Overseas persons)) would be, a regulated activity.

Electronic Money

The investment, specified in article 74A of the Regulated Activities Order (Electronic money), which is monetary value, as represented by a claim on the issuer, which is:

(a) stored on an electronic device;

(b) issued on receipt of funds; and(c) accepted as a means of payment by persons other than the issuer.

Eligible Claimant

A person who is eligible to bring a claim for compensation under COMP 4.2.1R.

E-Money

Electronic money.

Energy

Collective Investment Scheme

A collective investment scheme, the property of which consists only of energy, energy investments, greenhouse gas emissions allowances, tradable renewable

energy credits or cash awaiting investment.

Execution Only Transaction

A transaction executed by a firm upon the specific instructions of a client where the firm does not give advice on investments relating to the merits of the transaction.

Exempt Activity

(in relation to a recognised body) any regulated activity in respect of which the body is exempt from the general prohibition as a result of section 285(2) or (3) of the Act (Exemption for recognised investment exchanges and clearing houses).

Exempt Person

(as defined in section 417(1) of the Act (Definitions)) (in relation to a regulated

activity) a person who is exempt from the general prohibition in respect of that activity as a result of:

(a) the Exemption Order; or

(b) being an appointed representative; or

Exempt Professional Firm

A person to whom, under section 327 of the Act, the general prohibition does not apply; guidance is given in PROF 2.2 (Exempt regulated activities).

Exempt

Regulated

Activity

(As defined in section 325(2) of the Act (Authority's general duty)) a regulated activity which may, as a result of Part XX of the Act (Provision of Financial Services by Members of the Professions), be carried on by members of a profession which is supervised and regulated by a designated professional body without breaching the general prohibition.

Exemption Order

The Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201).

Exercise Notice

(in LR) (in relation to securitised derivatives), a document that notifies the issuer

of a holder's intention to exercise its rights under the securitised derivative.

-F-

Final Notice

A notice given by the FSA under section 390 of the Act (Final notices).

Financial Conglomerate

(in accordance with Article 2(14) of the Financial Groups Directive (Definitions)) a consolidation group that is identified as a financial conglomerate by the financial conglomerate definition decision tree.

Financial Crime

(in accordance with section 6(3) of the Act) any kind of criminal conduct relating to money or to financial services or markets, including any offence involving:

(a) fraud or dishonesty; or

(b) misconduct in, or misuse of information relating to, a financial market; or

in this definition, "offence" includes an act or omission which would be an

offence if it had taken place in the United Kingdom.

Forward Price

(in relation to units) a price calculated by reference to the valuation point next following the authorised fund manager's agreement to sell or, as the case may be, to redeem the units in question.

Free Standing Additional Voluntary Contribution

an additional voluntary contribution to a private pension policy or pension contract separate from but associated with an occupational pension scheme which is an approved arrangement under section 591(2)(h) of the Income and Corporation Taxes Act 1988.

Friendly Society

An incorporated friendly society or a registered friendly society.

Front End Loaded

(in relation to an investment) one where deductions for charges and expenses

are loaded disproportionately on the early years.

-G-

Gearing

(in COB) a strategy, with a view to enhancing the return for, or the value of, a

security without increasing the amount invested by the holders of the security,

involving one or more of the following:

(a) borrowing money;

(b) investing in one or more instruments, such as (but not limited to) warrants or derivatives, for which a relatively small movement in the value or price of the underlying rights or assets to which the instrument relates, whether favourable or adverse, results in a larger movement in the value or price of the instrument; and

(c) structuring the rights of holders of a security so that a relatively small movement in the price or value of the underlying rights or assets, whether favourable or adverse, results in a larger movement in the price or value of the security.

General Levy

(in DISP ) the annual fee raised from a firm under the rules to fund a part agreed between the Financial Ombudsman Service and the FSA of the Financial Ombudsman Service's annual budget.

Global Account

The accounts produced under LLD 15.10 (The Lloyd's global account).

Greenshoe Option

(As defined in Article 2 of the Buy-back and Stabilisation Regulation) an option granted by the offeror in favour of the investment firm(s) or credit institution(s) involved in the offer for the purpose of covering overallotments, under the terms of which such firm(s) or institution(s) may purchase up to a certain amount of relevant securities at the offer price for a certain period of time after the offer of the relevant securities.

Guarantee

(1) (in LR) (in relation to securitised derivatives), either:

(a) a guarantee given in accordance with LR 19.2.2R(3) (if any); or

(b) any other guarantee of the issue of securitised derivatives.

(2) (in PR) (as defined in the PD Regulation) any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of guarantee, surety, keep well agreement, mono-line insurance policy or other equivalent commitment.

Guarantor

(in PR) a person that provides a guarantee.

-H-

Habitual Residence

(a) if the policyholder is an individual, the address given by the policyholder as his residence if it reasonably appears to be a residential address and there is no evidence to the contrary;

(b) if the policyholder is not an individual or a group of individuals, the State in which the policyholder has its place of establishment, or, if it has more than one, its relevant place of establishment;

(c) in respect of the variation of a life policy, or the purchase of a pension annuity related to a life policy, unless there is evidence to the contrary, the habitual residence of the policyholder at the date on which the policyholder signed the proposal for the life policy.

Higher Lending Charge

A fee charged by a mortgage lender (under a regulated mortgage contract) where

the amount borrowed exceeds a given percentage of the value of the property.

Home State Regulator

(1) (in relation to an EEA firm) (as defined in paragraph 9 of Schedule 3 to the Act (EEA Passport Rights)) the competent authority (under the relevant Single Market Directive) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned.

(2) (in relation to a UK firm) the FSA.

(3) (in relation to a Treaty firm) (as defined in paragraph 1 of Schedule 4 to the Act (Treaty Rights)) the competent authority of the firm's Home State for the purpose of its Home State authorisation.

-I-

Illustration

(in MCOB) the illustration of the costs and features of a regulated mortgage contract which is required to be provided by MCOB 5 (Pre-application disclosure), MCOB 6 (Disclosure at the offer stage), MCOB 7 (Disclosure at start of contract and after sale) and MCOB 9 (Lifetime mortgages: product disclosure).

Income Drawdown

A facility which allows a delay in buying an annuity if rates should be low when retirement age is reached. Drawdown allows putting off buying an annuity to a maximum age of 75, giving an income directly from the pension fund in the meantime.

Incoming ECA Provider

A person, other than an exempt person or a person who has been given a waiver in accordance with article 8(1) of the E-Money Directive, who:

(a) provides an electronic commerce activity, from an establishment in an EEA State other than the United Kingdom, with or for a UK ECA recipient; and

(b) is a national of an EEA State or a company or firm mentioned in

article 48 of the Treaty.

Incoming EEA Firm

(in accordance with section 193(1)(a) of the Act (Interpretation of this Part)) an

EEA firm which is exercising, or has exercised, its right to carry on a regulated activity in the United Kingdom in accordance with Schedule 3 to the Act (EEA Passport Rights).

Incoming Electronic Commerce Activity

(in accordance with regulation 2(1) of the ECD Regulations) an activity:

(a) which consists of the provision of an information society service from an establishment in an EEA State other than the United Kingdom to a person or persons in the United Kingdom; and

(b) which would, but for article 72A of the Regulated Activities Order (Information society services) (and irrespective of the effect of article 72 of that Order (Overseas Persons)), be a regulated activity.

Incoming Firm

(in accordance with section 193(1) of the Act (Interpretation of this Part)) an incoming EEA firm or an incoming Treaty firm.

Inside Information

Information held within a firm that is not readily available to regular users of a prescribed market. Such information could be open to market abuse.

Insider

A person who has access to inside information.

Insolvency Order

An administration order, compulsory winding up order, bankruptcy order, or sequestration order.

Insurance Undertaking

An undertaking, or (in COMP ) a member, whether or not an insurer, which carries on insurance business.

Intermediary

(in LLD ) a person who in the course of any business or profession invites other

persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance, but not a person who publishes such invitations only on behalf of, or to the order of, some other person.

Introducer

An individual appointed by a firm or by an appointed representative, to carry out in the course of designated investment business either or both of the following

activities:

(a) effecting introductions;

(b) distributing non-real time financial promotions.

Investment

(in accordance with sections 22(4) (The classes of activity and categories of investments) and 397(13) (Miscellaneous offences) of the Act) any investment, including any asset, right or interest.

ISA

An individual savings account.

Issue

(in relation to units)

(1) (except in ENF) the issue of new units by the trustee of an AUT or by an ICVC;

(2) (in ENF)

(a) an issue in accordance with (1); and

(b) the sale of units.

Issue Price

(in relation to the issue of units of a dual-priced AUT) the price for each unit payable by the manager to the trustee on that issue.

-J-

JMLSG Guidance Notes

Guidance manual provided by the Joint Money Laundering Steering Group covering the application of money laundering requirements, including the Money Laundering Regulations 2007.

Joint Enterprise

(as defined in article 3(1) of the Regulated Activities Order (Interpretation)) an enterprise into which two or more persons ("the participators") enter for commercial purposes related to a business or businesses (other than the business of engaging in a regulated activity) carried on by them; where a participator is a member of a group, each other member of the group is also to be regarded as a participator in the enterprise.

-K-

Key Features

Information about a life policy, scheme, or stakeholder pension scheme which is required to be produced in the format specified in COB 6.1 (Packaged products and ISA disclosure) to COB 6.5 (Content of key features and important information: life policies, schemes, cash deposit ISAs and stakeholder pension schemes).

Know Your Business Information

(in ML ) information which a relevant firm has about:

(a) the financial circumstances of a client or any person on whose behalf the client has been acting or is acting; and

(b) the features of the transactions which the relevant firm has entered into with or for the client (or that person).

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Lifetime Mortgage

A regulated mortgage contract under which:

(a) entry into the mortgage is restricted to older customers above a specified age; and

(b) the mortgage lender may or may not specify a mortgage term, but will not seek full repayment of the loan (including interest, if any, outstanding) until the occurrence of one or more of the following:

(i) the death of the customer; or

(ii) the customer leaves the mortgaged land to live elsewhere and has no reasonable prospect of returning (for example by moving into residential care); or

(iii) the customer acquires another dwelling for use as his main residence; or

(iv) the customer sells the mortgaged land; or

(v) the mortgage lender exercises its legal right to take possession of the mortgaged land under the terms of the contract.

and

main residence:

(i) no instalment repayments of the capital and no payment of interest on the capital (other than interest charged when all or part of the capital is repaid voluntarily by the customer), are due or capable of becoming due; or

(ii) although interest payments may become due, no full or partial repayment of the capital is due or capable of becoming due; or

(iii) although interest payments and partial repayment of the capital may become due, no full repayment of the capital is due or capable of becoming due.

Limited Issue Share

A share of a class the issue of which is restricted by reference to:

(a) the occasion or occasions on which shares of that class may be issued; or

(b) the amount or value of shares that may be issued.

Limited Liability Partnership

(a) a body corporate incorporated under the Limited Liability Partnerships Act 2000;

(b) a body corporate incorporated under legislation having the equivalent effect to the Limited Liability Partnerships Act 2000.

Liquidity Risk

The risk that a firm, although solvent, either does not have available sufficient

financial resources to enable it to meet its obligations as they fall due, or can secure such resources only at excessive cost.

Listed Activity

An activity listed in Annex 1 to the Banking Consolidation Directive.

Long-term care Insurance Contract

A long-term insurance contract which:

(a)

(i) provides (or would at the policyholder's option provide) benefits for the policyholder which are payable or provided in event that the policyholder's mental or physical health has deteriorated to the extent that he is incapacitated so that he is unable to live independently without assistance, and is not expected to recover to the extent that he can live independently without assistance; and

(ii) those benefits are payable or provided in respect of:

(A) services;

(B) accommodation; or

which are necessary or desirable for the continuing care of the policyholder because of the incapacity referred to in (i); and

(iii) the benefits under the contract are capable of being paid periodically for all or part of the period during which the policyholder is unable to live independently without assistance; or

(b) is sold or held out as providing benefits for the policyholder as set out in (a).

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Managing Agent

(as defined in article 3(1) of the Regulated Activities Order) a person who is permitted by the Council in the conduct of his business as an underwriting agent to perform for a member one or more of the following functions:

(a) underwriting contracts of insurance at Lloyd's;

(b) reinsuring such contracts in whole or in part;

Market Abuse

(in accordance with section 118 of the Act (Market abuse)) behaviour (whether

by one person alone or by two or more persons jointly or in concert) which:

(a) occurs in relation to qualifying investments traded or admitted to trading on a prescribed market or in respect of which a request for admission to trading on such a market has been made; and

(b) falls within any one or more of the types of behaviour set out in section 118

(2) to (8) of the Act.

Market Counterparty

(1) (except in ¡ COB 3) a client who is:

(a) a properly constituted government (including a quasi-governmental body or a government agency) of any country or territory;

(b) a central bank or other national monetary authority of any country or territory;

(d) a State investment body, or a body charged with, or intervening in, the management of the public debt;

(e) another firm, or an overseas financial services institution, except in relation to designated investment business, and related ancillary activities, conducted with or for that firm or institution, when that firm or institution is an intermediate customer in accordance with ¡ COB 4.1.7R (Classification of another firm or an overseas financial services institution);

(f) any associate of a firm (except an OPS firm), or of an overseas financial services institution, if the firm or institution consents;

(g) a client when he is classified as a market counterparty in accordance with i COB 4.1.12R (Large intermediate customer classified as a market counterparty);

(h) a recognised investment exchange, designated investment exchange, regulated market or clearing house when it is classified as a market counterparty in accordance with COB 4.1.8A R (Classification of an exchange or clearing house);

but excluding:

(A) a regulated collective investment scheme; and

(B) (except for the purposes of DISP ) a client, who would otherwise be a market counterparty, when he is classified as a private customer in accordance with COB 4.1.14R (Client classified as private customer).

(2) (in COB 3) a person in (1) and a person who would be such a person if he were a client.

Market Maker

(in relation to an investment) a person who (otherwise than in his capacity as the operator of a regulated collective investment scheme) holds himself out as able and willing to enter into transactions of sale and purchase in investments of that description at prices determined by him generally and continuously rather than in respect of each particular transaction.

Maxi-ISA

An ISA which includes a stocks and shares component and may also include other qualifying investments such as:

(a) a cash component;

(b) an insurance component;

as prescribed in paragraphs 7, 8 and 9 respectively of the ISA Regulations.

Mini-ISA

An ISA which contains only one of the following qualifying investments:

(a) a stocks and shares component;

(b) a cash component;

as prescribed in paragraph 7, 8 or 9 respectively of the ISA Regulations.

Money Laundering

This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.

Money Laundering Reporting Officer

The individual appointed by a relevant firm that ensures compliance with the Money Laundering Regulations 2003.

Money-Market Scheme

An authorised fund dedicated to:

(a) deposits; and

(b) debentures which are not transferable securities;

whether with or without securities which are transferable securities.

Mutual

An insurer which:

(a) if it is a body corporate has no share capital (except a wholly owned subsidiary with no share capital but limited by guarantee); or

(b) is a registered friendly society or incorporated friendly society; or

(c) is a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies (Northern Ireland) Act 1969.

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Nominee Company

A body corporate whose business consists solely of acting as a nominee holder

of investments or other property.

Notice of Discontinuance

A notice given by the FSA in accordance with section 389 of the Act (Notices of discontinuance) which states that the FSA has decided not to take the action proposed in a warning notice or the action to which a decision notice relates.

Notice of Intention

A notice of intention to establish a branch in an EEA State given by a UK firm under paragraph 19(2) of Part III of Schedule 3 to the Act (Exercise of passport

rights by UK firm.

Notional Principal

(a) (in relation to a contract for differences which is an index derivative):

(i) the current mark to market valuation of a contract for differences which resembles a futures contract; or

(ii) the exercise value of a contract for differences which resembles an option contract;

(b) (in relation to any other contract for differences) the notional lot size of the contract.

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Occasional Insider

An Occasional insider is an individual who has occasional exposure to material inside information regarding the company. That person can be anyone who has occasional access to inside information by reason of his function within the company or in the context of his professional relationship with the company.

Occupational Pension Scheme

As specified in article 3(1) of the Regulated Activities Order (Interpretation)) any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employment so as to provide benefits, in the

form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with a qualifying service in an employment of any such description or category.

Offeree

(in MAR 1) an offeree as defined in the Takeover Code. (3) (in LR, PR and ENF 21 ) an offer of transferable securities to the public .

Oil Market Participant

A firm:

(a) whose permission:

(i) includes a requirement that the firm must not carry on any designated investment business other than oil market activity; and

(ii) does not include a requirement that it comply with IPRU(INV) 5 (Investment management firms) or 13 (Personal investment firms); and

(b) which is not an authorised professional firm, bank, building society, credit union, friendly society, ICVC, insurer, ISD investment firm, media firm, service company, insurance intermediary, mortgage administrator , mortgage intermediary, mortgage lender, incoming EEA firm (without a top-up permission), or incoming Treaty firm (without a top-up permission).

Open-ended Investment Company

(as defined in section 236 of the Act (Open-ended investment companies)) a collective investment scheme which satisfies both the property condition and the investment condition:

(a) the property condition is that the property belongs beneficially to, and is managed by or on behalf of, a body corporate ("BC") having as its purpose the investment of its funds with the aim of:

(i) spreading investment risk; and

(ii) giving its members the benefit of the results of the management of those funds by or on behalf of that body;

(b) the investment condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme:

(i) expect that he would be able to realise, within a period appearing to him to be reasonable, his investment in the scheme (represented, at any given time, by the value of shares in, or securities of, BC held by him as a participant in the scheme); and

(ii) be satisfied that his investment would be realised on a basis calculated wholly or mainly by reference to the value of property in respect of which the scheme makes arrangements. (see also investment company with variable capital.)

Open-Market Option

The option to apply:

(a) the proceeds of a pension policy or pension contract; or

(b) the proceeds of a money-purchase occupational scheme for a particular occupational scheme member;

to purchase an annuity on the open market from a long-term insurer.

Option

The investment, specified in article 83 of the Regulated Activities Order (Options),

which is an option to acquire or dispose of:

(a) a designated investment (other than an option); or

(b) currency of the United Kingdom or of any other country or territory; or

(d) an option to acquire or dispose of an option specified in (a), (b) or (c).

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Packaged Product

(a) a life policy;

(b) a unit in a regulated collective investment scheme;

(d) a stakeholder pension scheme;

whether or not (in the case of (a), (b) or (c)) held within a PEP, an ISA or a CTF

and whether or not the packaged product is also a stakeholder product.

Part IV Permission

(as defined in section 40(4) of the Act (Application for permission)) a permission given by the FSA under Part IV of the Act (Permission to carry on regulated activities), or having effect as if so given.

Passported Activity

An activity carried on by an EEA firm, or by a UK firm, under an EEA right.

Pension Annuity

An investment purchased with the sums derived from the vesting (partial or full) of a pension policy or pension contract, for the purposes of securing the beneficiary's entitlement to immediate or future benefits.

Permanent Insider

A Permanent Insider is an individual who is seen to have ongoing exposure to material insider information regarding the company. The individual can be a company director, executive officer or staff member who has regular access to inside information by reason of his functions within the company or in the context of his professional relationship with the company.

Permission

Permission to carry on regulated activities; that is, any of the following:

(a) a Part IV permission;

(b) the permission that an incoming EEA firm has, under paragraph 15(1) of Schedule 3 to the Act (EEA Passport Rights), on qualifying for authorisation under paragraph 12 of that Schedule;

(c) the permission that an incoming Treaty firm has, under paragraph 4(1) of Schedule 4 to the Act (Treaty Rights), on qualifying for authorisation under paragraph 2 of that Schedule;

(d) the permission that a UCITS qualifier has, under paragraph 2(1) of Schedule 5 to the Act (Persons concerned in Collective Investment Schemes);

(e) the permission that an ICVC has, under paragraph 2(2) of Schedule 5 to the Act (Persons concerned in Collective Investment Schemes);

(f) the permission that the Society of Lloyd}s has, under section 315(2) of the Act (The Society: authorisation and permission), which is to be treated as a Part IV permission for the purposes of Part IV of the Act (Permission to carry on regulated activities) in accordance with section 315(3) of the Act.

Permitted

Activity

(1) (except in AUTH 5 and SUP 14) a regulated activity which a firm has permission to carry on.

(2) (in AUTH 5 and SUP 14) an activity identified in a consent notice, a regulator's notice or, where none is required, a notice of intention.

Personal Equity Plan

A scheme of investment satisfying the conditions prescribed in regulations made by the Treasury under section 333 of the Income and Corporation Taxes Act 1988 (the Personal Equity Plan Regulations 1989).

Placing

(in LR) a marketing of securities already in issue but not listed or not yet in issue, to specified persons or clients of the sponsor or any securities house assisting in the placing, which does not involve an offer to the public or to existing holders of the issuer's securities generally.

Policy Statement

A statement that provides feedback to consultation papers and amends regulatory policy

Prescribed Market

A market which has been prescribed by the Treasury in the Prescribed Markets and Qualifying Investments Order market.

Principal

(1) in relation to a person:

(a) a person acting on his own account;

(b) (if the person is an appointed representative) the authorised person who is party to a contract with the appointed representative resulting in him being exempt under section 39 of the Act (Exemption of appointed representatives).

(2) in relation to an option, future or forward contract:

(a) (except in the case of an option on a future) the amount of property or the value of the property which must be delivered in order to satisfy settlement of the option, future or forward contract;

(b) (in relation to an option on a future) the amount of property or the value of the property which must be delivered in order to satisfy settlement of the future.

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Qualified Investor

(in PR) (as defined in section 86(7) of the Act):

(a) any entity within the meaning of Article 2(1)(e)(i), (ii) or (iii) of the prospectus directive; or

(b) an investor registered on the register maintained by the competent authority under section 87R of the Act; or

(c) an investor authorised by an EEA State other than the United Kingdom to be considered as a qualified investor for the purposes of the prospectus directive.

Qualifying Investment

An investment which has been prescribed by the Treasury in the Prescribed Markets and Qualifying Investments Order

Quasi-Directive Contract

A contract or asset having the effect of a derivative contract.

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Readily Realisable Investment

(a) a packaged product;

(b) a readily realisable security.

Recognised Body

An Recognised Investment Exchange or a Recognised Clearing House.

Regular User

(as defined in section 130A(3) of the Act (Market abuse)) a person who is, in relation to

a particular market, a reasonable person who regularly deals on that market in investments of the kind in question.

Regulated

Activity

A regulated activity as defined by the FSMA 2000.

Regulatory Body

Any authority, body or person having, or who has had, responsibility for the supervision or regulation of any regulated activities or other financial services, whether in the United Kingdom or overseas.

Regulatory Function

(as defined in section 291 of the Act (Liability in relation to recognised body's regulatory

functions)) any function of a recognised body so far as relating to, or to matters arising out of, the obligations to which the body is subject under or by virtue of the Act.

Remuneration

Any form of remuneration, including benefits of any kind.

Repo

(a) an agreement between a seller and buyer for the sale of securities, under which the seller agrees to repurchase the securities, or equivalent securities, at an agreed date and, usually, at a stated price;

(b) an agreement between a buyer and seller for the purchase of securities, under which the buyer agrees to resell the securities, or equivalent securities, at an agreed date and, usually, at a stated price.

Required

Function

Any of controlled functions 8 to 12 in the table of controlled functions as defined by the FSA.

Rights Issue

(in LR) an offer to existing security holders to subscribe or purchase further securities in proportion to their holdings made by means of the issue of a renounceable letter (or other negotiable document) which may be traded (as "nil paid" rights) for a period before payment for the securities is due.

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Schedule

(in Part 6 rules) (as defined in the PD Regulation) a list of minimum information requirements adapted to the particular nature of the different types of issuers

and/or the different securities involved.

Securitised Derivative

An option or contract for differences which, in either case, is listed under LR 19 of the listing rules (including such an option or contract for differenceswhich is also a debenture). (see also ¡ COB 5.4.3A G for the treatment of a securitised derivative.)

Senior Manager

An individual other than a director:

(a) who is employed by:

(i) a firm; or

(ii) a body corporate within a group of which the firm is a member;

(b) to whom the governing body of the firm, or a member of the governing body of the firm, has given responsibility, either alone or jointly with others, for management and supervision;

(i) the governing body; or

(ii) a member of the governing body; or

(iii) the chief executive; or

(iv) the head of a significant business unit; and

(d) who, if the individual is employed by a body corporate within the group, reports directly to a person who is the equivalent of a body or person referred to in (c).

Significant Influence Function

Any of the controlled functions 1 to 20 in the table of controlled functions.

Simplified Prospectus

(in relation to a simplified prospectus scheme) a marketing document containing

information about the scheme and complying with the requirements in COB 6.2.26R (Production and publication of simplified prospectus) and COB 6.2.37R

(Table: Contents of the simplified prospectus).

Skilled Person

A person appointed to make a report required by section 166 of the Act (Reports by skilled persons) for provision to the FSA and who must be a person:

(a) nominated or approved by the FSA; and

(b) appearing to the FSA to have the skills necessary to make a report on the matter concerned.

Solicted Real

Time Promotion

(in accordance with article 8 of the Financial Promotion Order) (as more fully described in ¡ COB 3.10.1R (Meaning of "solicited" and "unsolicited" time financial promotion real time financial promotion) and AUTH App 1.10 (Types of financial promotion))) a real time financial promotion which is solicited, that is, it is made in the course of a personal visit, telephone call or other interactive dialogue if that call, visit or dialogue:

(a) was initiated by the recipient of the financial promotion; or

(b) takes place in response to an express request from the recipient of the financial promotion.

Specified Investment

Any of the following investments specified in Part III of the Regulated Activities

Order (Specified Investments):

(a) deposit (article 74);

(aa) electronic money (article 74A);

(b) contract of insurance (article 75); for the purposes of the permission regime, this is sub-divided into:

(i) general insurance contract;

(ii) long-term insurance contract;

and then further sub-divided into classes of contract of insurance;

(d) debenture (article 77);

(e) government and public security (article 78);

(f) warrant (article 79);

(g) certificate representing certain securities (article 80);

(h) unit (article 81);

(i) stakeholder pension scheme (article 82);

(j) option (article 83); for the purposes of the permission regime, this is sub-divided into:

(i) option (excluding a commodity option and an option on a commodity future);

(ii) commodity option and an option on a commodity future;

(k) future (article 84); for the purposes of the permission regime, this is sub-divided into:

(i) future (excluding a commodity future and a rolling spot forex contract);

(ii) commodity future;

(iii) rolling spot forex contract;

(l) contract for differences (article 85); for the purposes of the permission regime, this is sub-divided into:

(i) contract for differences (excluding a spread bet and a rolling spot forex contract);

(ii) spread bet;

(iii) rolling spot forex contract;

(m) underwriting capacity of a Lloyd's syndicate (article 86(1));

(n) membership of a Lloyd's syndicate (article 86(2));

(o) funeral plan contract (article 87);

(oa) regulated mortgage contract (article 61(3);

(p) rights to or interests in investments (article 89).

Statutory Notice

A warning notice, decision notice or supervisory notice.

Step-Up

(1) (in relation to a tier one instrument) has the meaning set out in PRU 2.2.74R;

and (2) (in relation to a tier two instrument) has the meaning set out in PRU 2.2.118R.

Supervisory Notice

(as defined in section 395(13) of the Act (The Authority's procedures)) a notice

given by the FSA in accordance with section 53(4), (7) or (8)(b); 78(2) or (5); 197(3), (6) or (7)(b); 259(3), (8) or (9)(b); 268(3), (7)(a) or (9)(a) (as a result of subsection (8)(b)); 282(3), (6) or (7)(b); or 321(2) or (5).

Surrender Value

(a) where the contract is a contract of life assurance or a contract for an annuity, the amount ( including a nil amount) payable by the firm or other body issuing the contract on surrender of the policy;

(b) where the contract is a pension contract, the amount payable on the transfer of the investor's accrued rights under that contract to another pension contract;

(c) where the contract is a Holloway sickness policy, the amount payable by the firm on surrender on or before the projection date for the policy;

(d) where the contract is for any other matter, the amount payable by the firm on the surrender of the policy.

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Takeover Bid

An offer, as the term is used in the Takeover Code, or any other similar conduct

governed by that code.

Takeover Panel

The Panel on Takeovers and Mergers.

Terms of

Business

A statement in a durable medium of the terms and conditions on which a firm will conduct designated investment business with or for a client or retail customer.

Threshold Condition

(in relation to a regulated activity) any of the conditions set out in or under Schedule 6 to the Act (Threshold conditions), including the additional conditions in the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 2001/2507) (see COND).

Tontines

(in relation to a class of contract of insurance) tontines as specified in paragraph V of Part II of Schedule 1 to the Regulated Activities Order (Contracts of long-term insurance).

Trustee

(in accordance with section 237(2) of the Act (Other definitions)) (in relation to

a unit trust scheme) the person holding the property in question on trust for the

participants.

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Umbrella Scheme

(in CIS ) an authorised fund that is an umbrella except in CIS 2.1 and CIS 5A where such a reference is to a scheme authorised as the type of scheme under

CIS 21.1.4R(10) (Types of authorised fund).

Underwriting Agent

A firm permitted by the Council to act as an underwriting agent at Lloyd's.

Unit Trust Scheme

(as defined in section 237(1) of the Act (Other definitions)) a collective investment scheme under which the property in question is held on trust for the participants.

Unitisation

Arrangements for a newly formed dual-priced AUT under which:

(a) the whole or part of the property of a body corporate (or a collective investment scheme) becomes the first property to be held on the trusts of the AUT; and

(b) the holders of shares (or units) in the body corporate (or collective investment scheme) being wound up or property of which is being transferred become the first participants in the AUT.

Unregulated Activity

An activity which is not a regulated activity.

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Valuation Point

(in COLL and CIS) a valuation point fixed by the authorised fund manager for the purpose of COLL 6.3.4R (Valuation points), COLL 8.5.9R (Valuation, pricing and dealings), CIS 4.8.5R (Regular valuation points), CIS 4.8.6R (Additional valuation points) or CIS 15.8.3(1) or (2)R (Frequency of valuation).

Venture Capital Business

The business of carrying on any of:

(a) investing in, advising on investments which are, managing investments which are, arranging (bringing about) transactions in, or making arrangements with a view to transactions in, venture capital investments;

(b) advising on investments or managing investments in relation to portfolios, or establishing, operating or winding up collective investment schemes, where the portfolios or collective investment schemes (apart from funds awaiting investment) invest only in venture capital investments;

(a) and (b);

(d) any related ancillary activities.

VJ Participant

A person subject to the Voluntary Jurisdiction by contract.

Voluntary Jurisdiction

The jurisdiction of the Financial Ombudsman Service in which persons (whether authorised or unauthorised) participate by contract.

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Warning Notice

A notice issued by the FSA in accordance with section 387 of the Act (Warning

notices).

Warrant

(1) (except in CIS ) the investment, specified in article 79 of the Regulated Activities Order (Instruments giving entitlements to investments), which is in summary: a warrant or other instrument entitling the holder to subscribe for a share, debenture or government and public security.

(2) (in CIS ) an investment in (1) and any other transferable security (not being a nil paid or partly paid security) which is:

(i) listed on an eligible securities market; and

(ii) akin to an investment within (1) in that it involves a down payment by the then holder and a right later to surrender the instrument and to pay more money in return for a further transferable security.

Whole Life Insurance

The business of effecting or carrying out with-profits insurance contracts.

With-Profits Fund

(1) for the purposes of COB:

(a) a long-term insurance fund (or that part of such a fund) in which policyholders are eligible to participate in any established surplus; and

(b) where it is an insurer's usual practice to restrict policyholders' participation in any established surplus to that arising from only a part of the fund (or part fund) falling within (a), that part (or that part of the part fund).

(2) for the purposes of PRU, a long-term insurance fund in which policyholders are eligible to participate in any established surplus.

With-Profits Policy

A contract falling within a class of long-term insurance business which is eligible

to participate in any part of any established surplus.

Zero Weighted Asset

(in ELM ) an investment falling into ELM 3.3.8R (Liquid assets).

Zillmerising

The method known by that name for modifying the net premium reserve method

of valuing a long-term insurance contract by increasing the part of the future premiums for which credit is taken so as to allow for initial expenses.