Featured Product

    FCA Seeks Views on New Prudential Regime for UK Investment Firms

    June 23, 2020

    FCA published a discussion paper on the prudential regime for investment firms in UK. The discussion paper sets out the technical details of, and initial views of FCA on, the Investment Firm Directive (IFD) and the Investment Firm Regulation (IFR). In December 2019, the Official Journal of the European Union published IFD and IFR, with which the investment firms and competent authorities in EU member states will be required to comply from June 2021. As UK has exited the EU, FCA will not implement the IFD and IFR. The government will instead introduce a framework for a new prudential regime for investment firms in UK. FCA is seeking views on how best to implement this new regime. The comment period for this discussion paper ends on September 25, 2020. FCA will consider the feedback and publish a consultation paper later in 2020.

    The discussion paper is relevant for all solo-regulated investment firms that are authorized under the Markets in Financial Instruments Directive (MiFID). It will also be of interest to Collective Portfolio Management Investment Firms and to investment firms authorized by PRA. The approach that has been followed in the discussion paper is to set out, coherently and logically, the requirements the IFD/IFR places on EU firms and competent authorities. Where relevant, FCA has also set out in each chapter its initial views on the intention and implication of the regime and interpretation of it. This is particularly the case where the regime makes a material change to the status quo, or where the EU text provides for national discretions, or has ambiguities. 

    The IFD and IFR represent a significant change to how MiFID investment firms will be prudentially regulated. Investment firms should be aware of the scale of the change the IFD and IFR represent. In addition to various less material changes compared to the existing regime, major changes described in the discussion paper include:

    • An update to the initial capital required for authorization
    • Changes to the rules on the definition of capital
    • New own funds requirements, including the introduction of the K-factor approach
    • New rules on prudential consolidation, group risk, and concentration risk
    • Applying liquidity requirements to all investment firms
    • A new approach for investment firms' internal risk and prudential assessments and the supervision of those requirements
    • New requirements on remuneration policies
    • Changes to reporting and disclosure requirements


    Related Links

    Comment Due Date: September 25, 2020

    Keywords:  Europe, UK, Securities, IFR, IFD, MIFID, Regulatory Capital, Investment Firms, Reporting, Disclosures, ESG, FCA

    Featured Experts
    Related Articles

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307