SCHEDULE 3Capital requirements
PART 2Own Funds
Method C
18
1
“Method C” means the calculation method set out in this paragraph.
2
The own funds requirement is the relevant indicator multiplied by—
a
the multiplication factor; and
b
the scaling factor;
subject to the proviso in sub-paragraph (7).
3
The “relevant indicator” is the sum of the following elements—
a
interest income;
b
interest expenses;
c
gross commissions and fees received; and
d
gross other operating income.
4
For the purpose of calculating the relevant indicator—
a
each element must be included in the sum with its positive or negative sign;
b
income from extraordinary or irregular items may not be used;
c
expenditure on the outsourcing of services rendered by third parties may reduce the relevant indicator if the expenditure is incurred from a payment service provider;
d
the relevant indicator is calculated on the basis of the twelve-monthly observation at the end of the previous financial year;
e
the relevant indicator must be calculated over the previous financial year; and
f
audited figures must be used unless they are not available in which case business estimates may be used.
5
The “multiplication factor” is the sum of—
a
10% of the first 2,500,000 euro of the relevant indicator;
b
8% of the next 2,500,000 euro of the relevant indicator;
c
6% of the next 20,000,000 euro of the relevant indicator;
d
3% of the next 25,000,000 euro of the relevant indicator; and
e
1.5% of any remaining amount of the relevant indicator.
6
“Scaling factor” has the meaning given in paragraph 17(4).
7
The proviso is that the own funds requirement must not be less than 80 % of the average of the previous three financial years for the relevant indicator.