RegAlert2016-07-20
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A new UK prudential regime for MiFID investment firms
The Financial Conduct Authority proposes the Investment Firm Prudential Regime (IFPR) to replace the current prudential framework for UK firms authorised under the Markets in Financial Instruments Directive (MiFID). The proposals introduce a fixed overheads requirement, activity-based capital requirements known as K-factors, and a basic liquid asset requirement equivalent to at least one third of the fixed overheads requirement. All affected firms must implement an internal capital and risk assessment process to meet the Overall Financial Adequacy Rule, while remuneration requirements are scaled based on firm size. This consultation paper seeks comments on these draft rules by 28 May 2021.
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A new UK prudential regime for
MiFID investment firms
Consultation Paper
CP21/7*
April 2021
CP21/7 Financial Conduct Authority
A new UK prudential regime for MiFID investment firms How to respond We are asking for comments on this Consultation Paper (CP) by 28 May 2021. You can send them to us using the form on our website at:
www.fca.org.uk/cp21-07-response-form
Or in writing to:
Paul Rich or Hillary Neale
Financial Conduct Authority
12 Endeavour Square London E20 1JN
Telephone:
020 7066 1000
Email:
cp21-07@fca.org.uk
Sign up for our news and publications alerts See all our latest press releases, consultations and speeches. Contents 1 Summary 3 2 The wider context of this consultation 8 3 How these rules will apply 10 4 Own funds requirements 12 5 Firms acting as clearing members and indirect clearing firms 30 6 Basic liquid assets requirement 32 7 Risk Management, ICARA and SREP 35 8 Governance 58 9 MIFIDPRU Remuneration Code: scope and application 63 10 MIFIDPRU Remuneration Code: basic remuneration requirements 74 11 MIFIDPRU Remuneration Code: standard remuneration requirements 80 12 MIFIDPRU Remuneration Code: extended remuneration requirements 86 13 Regulatory reporting 91 14 Interaction of MIFIDPRU with other prudential sourcebooks 95 15 Applications and notifications 101 16 Our approach to the Financial Services Bill and compatibility with our duties and principles 110
Annex 1
Questions in this paper 128
Annex 2
Cost benefit analysis 132
Annex 3
The own funds threshold requirement and intervention points 152
Annex 4
The liquid assets threshold requirement and intervention points 159
Annex 5
Application of remuneration requirements 163
Annex 6
Compatibility statement 164
Annex 7
Abbreviations used in this paper 165
Appendix 1
Draft Handbook text
Appendix 2
General Guidance on the application of ex-post risk adjustment to variable remuneration
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Source: Financial Conduct Authority — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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