5.1 Application of Chapter 5

Other than Rule 5.3, this Chapter does not apply to a PRU Investment Firm that is an Externally Regulated PRU Investment Firm.

5.2 Application of Chapters 3 and 4 to Financial Groups

(1) Where the AFSA directs that the PRU Investment Firm should comply with Chapters 3 and 4 at the level of its Financial Group, the PRU Investment Firm must, in addition to complying with those Rules on a solo basis, ensure that the financial position of its Financial Group on a consolidated basis is compliant with those Rules (as if the Financial Group, treated as a single entity, were a PRU Investment Firm).

(2) The Financial Group of a PRU Investment Firm is made up of:

• (a) the PRU Investment Firm;
• (b) any Subsidiary (direct or indirect) of the PRU Investment Firm that carries on any PRU Investment Business in any jurisdiction; and
• (c) any other entity that the AFSA directs should be included in the Financial Group due to there being a high degree of financial interdependence between the PRU Investment Firm and that entity.

(3) A PRU Investment Firm may apply to the AFSA for approval to exclude an entity from its Financial Group. The AFSA will grant such an approval only after the PRU Investment Firm satisfies the AFSA that inclusion of the entity would not materially alter the risk profile of the PRU Investment Firm and/or its Financial Group and that the exclusion of that entity would not hinder AFSA’s ability to effectively supervise the PRU Investment Firm and its Financial Group.

Guidance

The AFSA would consider a range of factors when requiring a PRU Investment Firm to treat another entity as part of its Financial Group. These factors would include direct and indirect participation, influence or contractual obligations, interconnectedness, intra-group exposures, intra-group services, regulatory status and nature of business of other entities in the group and the legal framework.

5.3 Accepting deposits

No PRU Investment Firm shall be, or shall have a Subsidiary that is, authorised to accept deposits in any jurisdiction.