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HMRC internal manual

Banking Manual

Bank compensation restriction: definition of banking company: excluded companies - companies carrying on a second line of business

CTA09/S133F (2A) & (2B)

Several of the excluded companies rules in CTA09/S133F(2) require that the company does not carry on any relevant regulated activities other than for the purpose of one particular line of business.  

Where a company would meet the requirements in the excluded entities list but for the fact it has one other line of business that carries on relevant regulated activities the company will still be an excluded company if the second line of business does not involve deposit taking and:

  • the company’s activities in that line of business would not, on their own, result in it being both an IFPRU 730K firm and a full scope IFPRU investment firm if it only carried on this second line of business and the relevant conduct occurred on or after 1 January 2014
  • the company’s activities in that line of business would not, on their own, result in it being both an BIPRU 730K firm and a full scope BIPRU investment firm if it only carried on the second line of business and the relevant conduct occurred before 1 January 2014

In practice this means that a company will still be an excluded company if it takes on another regulated activity which on its own would not be regarded as investment banking. See BKM207850 for an example of this.