The Investment Firms Prudential Regime (IFPR)
On 1 January 2022, the FCA's IFPR will come into force in the UK. The new regime is designed to simplify the prudential requirements for MiFID investment firms prudentially regulated by the FCA. The IFPR introduces a new capital requirements methodology, as well as new reporting, disclosure and remuneration rules. The new rules will largely be contained in the FCA's new MIFIDPRU sourcebook.
Who does the IFPR apply to?
The IFPR will apply to the following types of firm:
- MiFID investment firms authorised and regulated by the FCA;
- Collective Portfolio Management Investment Firms; and
- Regulated or unregulated holding companies of groups that contain either of the above types of firm.
The IFPR will not apply to PRA-designated investment firms.
Transitional arrangements are available for certain types of firm, which will delay the application of parts of the regime.
The FCA's IFPR Questionnaire
Ahead of the 1 January 2022 implementation date, investment firms are being asked to fill in a Questionnaire, which includes questions relating to the firm’s status as a small and non-interconnected FCA investment firm (SNI), investment firms' corporate structures and their expected ICARA reporting dates.
This can raise complex questions for firms, particularly in relation to the application of IFPR on a consolidated basis to investment firm groups and the steps that it may be possible to take to mitigate the impact of the IFPR on your group’s capital requirements.
We have been advising on these matters for several clients. If you would like assistance with completing your IFPR Questionnaire, or on steps that may be taken to mitigate the impact on your capital framework, please get in touch with any of the contacts listed.
Please also get in touch if you would like advice on your implementation of the IFPR requirements from 1 January 2022.
Authored by Anahita Patwardhan and Michael Thomas.