FCA launches second consultation on new prudential regime

Released 19 April 2021

The Financial Conduct Authority (FCA) is seeking feedback from UK investment firms on introducing the UK Investment Firm Prudential Regime (IFPR) for FCA prudentially-regulated investment firms.

The IFPR introduces a new prudential regime for MiFID investment firms regulated by the FCA. It will create a single, proportionate regime that reflects firms' size and business.

The regime focuses prudential requirements on the potential harm to consumers, clients, and the market. It includes the amount of liquid assets and capital levels a firm should hold to enable it to wind down in an orderly way if required.

In the second of three consultations, the FCA is asking for views on:

remaining aspects on own funds requirements (such as the Fixed Overheads Requirement);

the basic liquid assets requirement;

remuneration requirements; and

risk management – the Internal Capital and Risk Assessment (ICARA) process.

The consultation runs until 28 May 2021.

Further details can be found at https://www.fca.org.uk/news/news-stories/second-consultation-new-prudential-regime-uk-investment-firms.

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