FCA Started First Consultation on the Implementation of Investment Firms Prudential Regime

Proskauer Rose LLP
Contact

Proskauer Rose LLP

On 14 December 2020, the Financial Conduct Authority (“FCA”) published the first out of three consultation papers on the implementation of the Investment Firms Prudential Regime (“IFPR”) (CP20/24) in relation to a new UK prudential regime for investment firms authorised under the Markets in Financial Instruments Directive (EU/2014/65) (“MiFID”).

The UK government announced in July 2020 (please also refer to our article on these announcements) that it supported the intended outcomes of the new European prudential regime, but that it will not implement the new European prudential regime which will be introduced by the Investment Firms Regulation (EU/2019/2033) (“IFR”) and Investment Firms Directive (EU/ 2019/2034) (“IFD”).

Hence, the IFPR will be based on the European rules but will be adjusted to suit the UK regulatory environment after Brexit. The consultation paper presents a more simplified and streamlined approach to prudential requirements for solo-regulated investment firms in the UK and represents a major change for investment firms compared to the current UK regime. It is therefore critical that firms adequately prepare for the regime, even though the current implementation target for the IFPR is 1 January 2022.

The key proposals that are covered in this consultation paper include:

  • The categorisation of investment firms.
  • Prudential consolidation.
  • Own funds and own funds requirements.
  • Reporting requirements.

The FCA also intends to establish a new prudential sourcebook relating to the IFPR: the Prudential sourcebook for MiFID Investment Firms (“MIFIDPRU”).

UK firms within the scope of IFPR should monitor developments in relation to the FCA’s approach to the new regime closely as they will need to comply with the new requirements when they come into force in 2022.

If you have any questions on the proposals contained in CP20/24 or on the IFR/IFD, please get in touch with our European Financial Services Regulatory team.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Proskauer Rose LLP | Attorney Advertising

Written by:

Proskauer Rose LLP
Contact
more
less

Proskauer Rose LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.