The Financial Conduct Authority (FCA) has today published its first Policy Statement (PS21/6) relating to the Investment Firms Prudential Regime (IFPR). This Policy Statement covers the areas discussed in the first consultation paper, CP20/24 and some of the key things to note are:
Categorisation of firms
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No changes to SNI criteria
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Matched principal brokers will be classified as non SNI firms
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No additional clarity on ‘investment advice of an ongoing nature’
Prudential consolidation
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Clarification that non UK parents above the UK parent will not be captured
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CPMs and CPMIs will be ‘financial institutions’ and thus caught by investment firm group rules
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Credit institutions may be connected undertakings and thus have to be consolidated
Own funds
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Interim dividends can be deducted from interim profits without reducing own funds
Own funds requirements
- Clarification that for K-TCD, PFE should use gross values and if collateral is negative then the exposure value will increase
Concentration risk
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Exposures to 3rd country regional and local governments can be excluded as long as there’s no difference in risk compared to the central government and the latter has a 0% risk weighting
Reporting
- The FCA are considering whether to introduce new reports for securitisations
- Returns will have to be completed in GBP
Our webinar recorded on 19 January 2021 and related to CP20/24 is available on demand – VIEW WEBINAR
We would also encourage you to visit our IFPR resources page.
If you wish to discuss how the PS21/6 and the potential broader IFPR requirements may impact on your firm then please get in touch
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