Investment Firm Prudential Regime (IFPR) Support

Changes You Might Face

The FCA’s domestic implementation of the Investment Firm Prudential Regime (IFPR) this came into force from 1 January 2022. This Regime directly impacts UK firms authorised under UK MiFID and groups that they are involved with. Collective portfolio management investment (CPMI) firms when undertaking MiFID business are similarly affected.

The existing financial rules for investment firms were originally implemented in 1993 and are being substantially revised to move away from a banking approach to better align capital requirements to the risks that investment firms face.

The FCA is implementing the European IFPR through a new sourcebook, MIFIDPRU. The proposed new financial rules to be set out in the MIFIDPRU sourcebook will require MiFID investment firms and CPMIs operating in the UK to overhaul the way they measure and report their Own Funds Requirement and Liquid Asset Requirement.

Investment Firm Prudential Regime (IFPR) Support

How this might impact your business?

What are the key changes that will impact firms?

  • Changes to the level of initial capital to be held. Initial capital will become the Permanent Minimum Requirement and will increase for most firms
  • Enabling the firms to understand its classification as an SNI or non-SNI and the associated capital requirements
  • A new process called the Internal Capital and Risk Assessment (ICARA) process replacing the Internal Capital Adequacy Assessment Process (ICAAP)
  • New rules on remuneration and disclosure that allow less scope for firms to determine their approach based upon proportionality principles

How can we help?

Our team of compliance experts can assist firms at all stages of their IFPR implementation and ongoing reporting and regulatory compliance.