FCA Publishes Final Rules on Investment Firms Prudential Regime
The Financial Conduct Authority (FCA) published the final rules on the Investment Firms Prudential Regime (IFPR) to streamline and simplify the prudential requirements for solo-regulated UK firms authorized under the Markets in Financial Instruments Directive (MiFID). FCA has converted the near-final rules from the first two policy statements of the Investment Firms Prudential Regime into final rules. FCA has also published a summary of the minor changes made since it published the near-final versions of the instruments in the second policy statement in July 2021. FCA expects to publish a third policy statement by the end of 2021. The Investment Firms Prudential Regime shall come into force on January 01, 2022.
The published instruments include the Investment Firms Prudential Regime Instrument 2021 and the Investment Firms Prudential Regime (Consequential Amendments to Other Prudential Sourcebooks) Instrument 2021. In addition, FCA has published an updated version of general guidance on the application of ex-post risk adjustment to variable remuneration, which brings FCA investment firms into the scope of the guidance. The main purpose of this guidance is to set out the FCA expectations of the way in which firms comply with the requirements on ex-post risk adjustment. The guidance further details the FCA expectations on malus and clawback, including on how they should be invoked in an effective, timely, consistent, and transparent way. FCA also published a Remuneration Policy Statement template, which the FCA investment firms can use to document their remuneration policies and practices, along with a template, which FCA investment firms can use to record their material risk-takers. The Investment Firms Prudential Regime will apply to the MiFID investment firms authorized and regulated by FCA, the Collective Portfolio Management Investment Firms (CPMIs), and the regulated and unregulated holding companies of groups that contain either of the above. The Regime will not apply to PRA-designated investment firms and these firms will remain subject to prudential supervision by PRA.
Related Links
- Press Release
- Investment Firms Prudential Regime Instrument 2021 (PDF)
- IFPR (Consequential Amendments to Other Prudential Sourcebooks) Instrument 2021 (PDF)
- Summary of Updates (PDF)
- Guidance on Application of Ex-Post Risk Adjustment (PDF)
- Remuneration Policy Statement Template (DOCX)
- Template to Record Material Risk-Takers (XLSX)
- Overview of Investment Firms Prudential Regime
Effective Date: January 01, 2022
Keywords: Europe, UK, Securities, IFPR, Investment Firms, Remuneration, Reporting, FCA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
ESAs Propose New Rules for Taxonomy-Related Product DisclosuresRelated Articles
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
