UK Financial Conduct Authority Issues Second Policy Statement on the UK Investment Firms Prudential Regime

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July 26, 2021

TO: ICI Members
ICI Global Members SUBJECTS: International/Global RE: UK Financial Conduct Authority Issues Second Policy Statement on the UK Investment Firms Prudential Regime

 

On July 26, the UK Financial Conduct Authority (FCA) issued PS21/9 on the implementation of the investment firms prudential regime (IFPR).[1] The IFPR - a new prudential regime for investment firms authorized under the Markets in Financial Instruments Directive (MiFID) - creates a single, proportionate regime that is intended to reflect firms' size and business.

In April 2021 the FCA consulted, in CP21/7, on the second set of proposals to introduce the IFPR.[2] That consultation addressed: (1) remuneration requirements; (2) remaining aspects on own funds requirements (such as the fixed overheads requirement); (3) the basic liquid assets requirement; and (4) risk management - the Internal Capital and Risk Assessment (ICARA) process.

PS21/9 summarizes the feedback the FCA received to CP21/7, the FCA's response, and sets out near-final rules. The FCA expects the IFPR to take effect in January 2022.

We will follow up with a more detailed member memorandum shortly.

 

Eva M. Mykolenko
Associate Chief Counsel - Securities Regulation

 

endnotes

[1] PS21/9 is available at https://www.fca.org.uk/publication/policy/ps21-9.pdf.

[2] The consultation paper is available at https://www.fca.org.uk/publication/consultation/cp21-7.pdf. ICI Global's response to the consultation is available at https://www.ici.org/system/files/2021-06/33565a.pdf.