Local Government, England Citation, commencement and application 1 1 These Regulations may be cited as the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2012. 2 Regulations 1 to 3(a), 4(2), 7(b) and 8 come into force on 31st March 2012. 3 Regulations 3(b) and (c), 4(1) and (3), 5, 6 and the remainder of regulation 7 come into force on 1st April 2012. 4 These Regulations apply only in relation to local authorities in England. Amendment of Regulations 2 The Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 are amended as specified in regulations 3 to 8 . Definitions 3 In regulation 1 (interpretation) , in paragraph (5)— a in the definition of “money market fund”, for paragraph (a), substitute— a in accordance with Directive 2009/65/ EC of the European Parliament and of the Council of 13 July 2009 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities, is an undertaking for collective investment in transferable securities subject to that Directive; and ; b omit the definition of “multilateral development bank”; and c after the definition of “secure tenant” insert— “securitisation transaction” means a disposal for consideration by a local authority of all or part of its interest in specified revenues, where disposal includes both sale and assignment; . Credit arrangements 4 1 Before regulation 3 (liabilities that do not arise from capital expenditure) and the sub part heading “Transactions which are not credit arrangements”, insert— TRANSACTIONS WHICH ARE CREDIT ARRANGEMENTS Securitisation transactions 2A A securitisation transaction must be treated as a transaction falling within section 7(2)(a). . 2 In regulation 3(2), for the words “fixed asset”, substitute “non-current asset which is not a financial asset”. 3 For regulation 6 (calculation of cost of credit arrangements), substitute— 6 For the purposes of section 8(2) (entry into a credit arrangement or variation to be treated as the borrowing of an amount equal to the cost of the arrangement or variation), the cost of a credit arrangement or variation of a credit arrangement is— a in the case of a securitisation transaction, an amount equal to the value of the consideration received by the authority as a result of that transaction, or b in all other cases, the amount of the liability in respect of that arrangement or variation which is shown, in accordance with proper practices, in the authority’s accounts. . Bonds 5 1 In regulation 7 (repayment of loan etc to a local authority)— a in paragraph (2), for “paragraph (3)” substitute “paragraphs (3) and (4)”; and b after paragraph (3), insert— 4 A sum paid to a local authority to redeem a bond on its maturity or for the purchase of a bond does not constitute repayment of a loan or other financial assistance. . 2 For regulation 7A (loan capital) , substitute— Bonds 7A 1 Subject to paragraph (2), for the purposes of Chapter 1 of Part 1, a sum received by a local authority in respect of— a the redemption on maturity of a bond, or b the disposal of a bond, must be treated as a capital receipt. 2 Paragraph (1) applies only if— a the acquisition of the bond was prior to 1st April 2012, and b expenditure on the acquisition was treated as capital expenditure. . Capital receipts 6 After regulation 9A (Social HomeBuy receipts) , insert— Securitisation transaction receipts 9B For the purposes of Chapter 1 of Part 1, any sum received as consideration by a local authority as the result of a securitisation transaction which, apart from this regulation, would not be a capital receipt, must be treated as a capital receipt. . Expenditure to be capital expenditure 7 In regulation 25 (expenditure to be capital expenditure) — a in subsection (1)(d), omit “or loan capital”; b for subsection (1)(ea), substitute— ea expenditure incurred on the acquisition, production or construction of assets for use by, or disposal to, a person other than the local authority which would be capital expenditure if those assets were acquired, produced or constructed for use by the local authority; and ; and c omit subsection (3)(b). Proper practices 8 For paragraph (b) of regulation 31 (proper practices), substitute— b “Service Reporting Code of Practice for Local Authorities” published by CIPFA , as amended or reissued from time to time ; . Signed by authority of the Secretary of State for Communities and Local Government Bob Neill Parliamentary Under Secretary of State Department for Communities and Local Government 2nd February 2012