Capital requirements for personal investment firms (PIFs)

Requiring capital resources is one of the many ways we regulate firms prudentially.

On a domestic level, we have published a Policy Statement (PS15/28), which changes the capital resources rules for personal investment firms. These new requirements replace the rules in the FSA PS09/19 that were scheduled to come into force on 31 December 2015.

Generally, the new rules are:

  • A new minimum capital resources requirement of £20,000. This replaces the £10,000 minimum own funds previously required.
  • An income-based requirement. For the majority of PIFs this is 5% of the annual investment business income earned in the previous year.

The capital resources requirement is the higher of the two requirements above.

The rules came into effect on 30 June 2016, but there is a 12-month transitional period when the minimum capital resources requirement will be £15,000. This will switch to £20,000 from 30 June 2017 onwards.