BIPRU refers to well-know but, officially not used from the start of the 2014, definition of certain type of UK financial institutions. The term was used as an acronym to Prudential Sourcebook for Banks, Building Societies and Investment Firms. Although the BIPRU definitions are formally outdated, they still specified in the glossary of the handbook of the Prudential Regulation Authority.
From the start of 2014, regulation of BIPRU was officially replaced by the CRR (Capital Requirements Regulations) which established new management regulation for credit and investment institutions. The Prudential Regulation Authority implemented the CRR into the regulation, but in the same time FCA introduced Prudential sourcebook for investment firms.
BIPRU companies, according to Prudential Sourcebook for Banks and Investment Firms (BIPRU) Rule 1.1.7A, are investment institutions that:
- Do not provide services for the management of clients’ financial instruments, including storage and related administration.
- Do not provide the following services:
- trading in any financial instruments for their own benefit;
- issue of financial instruments;
- sale of financial instruments;
- services of a multilateral exchange office;
- are approved to provide at least one of the speculative transactions:
- execution of clients’ orders on financial instruments, or;
- management of financial instruments;
BIPRUs are companies whose main business includes the organization of investment capital management or speculative transactions with financial instruments, in accordance with sections 5, 6, 7, 9 and 10 of Section “C” of the MiFID.
BIPRU authorizations can be summarized as follows:
- Cannot hold the client’s funds (however, can manage the client’s funds), cannot provide any services specified in the MiFID add-on, except for: collecting and executing orders; execution of orders for clients on financial instruments; overall portfolio management.
- Offers types of assistance in executing orders on financial instruments for clients.
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