Regulatory Alerts2019-06-12
Our Framework: Assessing Adequate Financial Resources
The Financial Conduct Authority published this consultation paper to establish a risk-based framework requiring solo-regulated firms to assess and maintain adequate financial resources commensurate with their business complexity and potential to cause harm. Firms must implement forward-looking risk assessments, strengthen governance and control systems, and develop credible wind-down plans to ensure orderly market exits and minimize consumer and market disruption. The regulator mandates that capital and liquid resource levels directly reflect identified risks, aiming to prevent disorderly failures while reducing the financial burden on the industry and the Financial Services Compensation Scheme.
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