2.5.7 Requirements Relating to Preference Shares, Unsecured Loans and Others for General Trading Members

The following additional financial requirements apply to General Trading Members:

(a) a General Trading Member that holds a licence to engage in a Regulated Activity shall comply with the obligations under the Financial and Margin Regulations relating to the issue of any preference share and repurchase or redemption of any preference share (other than any paid-up irredeemable and non-cumulative preference share capital), drawing down and repayment in part or in full of any Qualifying Subordinated Loan principal, making of any unsecured loan or advance, payment of any dividend or director's fees or increase in any director's remuneration, with the additional condition that in relation to the repurchase or redemption of any preference share (other than any paid-up irredeemable and non-cumulative preference share capital), repayment in part or in full of any Qualifying Subordinated Loan principal, making of any unsecured loan or advance, payment of any dividend or director's fees or increase in any director's remuneration, a General Trading Member shall ensure that the sum of its Financial Resources or Adjusted Net Head Office Funds, as the case may be, are more than 150% of its Total Risk Requirement; and
(b) a General Trading Member that holds a licence to engage in a Regulated Activity shall not reduce its paid-up ordinary share capital or paid-up irredeemable and non-cumulative preference share capital without the prior written approval of the Exchange.
(c) A General Trading Member that holds a licence specified in Rule 2.4.1(b) shall notify the Exchange immediately of any action taken that has or may have a financial or capital impact on the General Trading Member and required to be reported to the Relevant Regulatory Authority, or in relation to the events set out in (a) and (b).

Amended on 25 August 200925 August 2009, 1 April 20141 April 2014 and 29 December 201429 December 2014.