Investment Firms Prudential Regime (IFPR)

The IFPR is our new prudential regime for MiFID investment firms. Find out who will be affected and how to prepare.

Why we are introducing the IFPR

The aim of the IFPR is to streamline and simplify the prudential requirements for MiFID investment firms that we prudentially regulate in the UK (FCA investment firms).

In line with our objectives and Mission, it will refocus prudential requirements and expectations away from the risks firms face, to also consider and look to manage the potential harm firms can pose to consumers and markets.

Who will be subject to the IFPR

The IFPR will apply to the following:

  • MiFID investment firms authorised and regulated by us
  • Collective Portfolio Management Investment Firms (CPMIs)
  • regulated and unregulated holding companies of groups that contain either of the above

The IFPR will not apply to PRA designated investment firms. They will remain subject to prudential supervision by the PRA.

Timeline

We have now converted the near-final rules from our first two policy statements of the Investment Firms Prudential Regime (IFPR) into final rules. We have also added additional final rules in our third policy statement. The new regime will come into force on 1 January 2022.  

Final rules and guidance

The final rules from our first and second policy statements are in the legal instruments – FCA 2021/38 and FCA 2021/39. You can read a summary of minor updates made since we published the near-final versions of the instruments in PS21/9. The final rules from our third policy statement are in the legal instruments - FCA 2021/49, FCA 2021/50 and FCA 2021/51.

You can now view the text of our final IFPR rules in the online FCA Handbook. To do this, select the 'show timeline' function and set the version date to 1 January 2022. The text of the new MIFIDPRU sourcebook will be contained in the Prudential Standards block. The text of the MIFIDPRU Remuneration Code (SYSC 19G) will be contained in the SYSC sourcebook in the High Level Standards block

We have published FG21/5: General guidance on the application of ex-post risk adjustment to variable remuneration. This guidance provides further detail of our expectations on malus and clawback, including on how they should be invoked in an effective, timely, consistent and transparent way. We consulted as part of CP21/7 on extending the existing guidance to FCA investment firms. 

Remuneration Policy Statement templates

We have published templates for Remuneration Policy Statements (RPS) which FCA investment firms may (but do not have to) use to record how their remuneration policies and practices comply with the MIFIDPRU Remuneration Code:

Prepare for the IFPR

The IFPR represents a major change for FCA investment firms. If you’re an FCA investment firm, it’s critical that you prepare for the regime.

You should familiarise yourself with our consultation proposals and final rules, so you are ready to meet the implementation date of 1 January 2022.

You can also sign up to our new IFPR newsletter by emailing [email protected] with ‘sign up’ in the subject line.

MIFIDPRU applications and notifications 

Our gateway for MIFIDPRU applications is now open. Application forms for the MIFIDPRU permissions listed below are now available and must be submitted via Connect. They are reproduced here for information only. These are the types of MIFIDPRU permissions that firms will need to apply for in advance of MIFIDPRU coming into force. 

We will make the remaining application forms and all notification forms available in the autumn. Please see chapter 15 of CP21/7 for the details of these forms. In CP21/26 we consulted on three additional forms, which once finalised, will also be made available on Connect later this year.

Changes to MiFID authorisation applications 

Firms seeking authorisation under MiFID will now see in their application form pack an additional form they need to complete as part of the process. This is the MIFIDPRU supplement form. This form requests information from applicant firms so we can assess their ability to meet the IFPR requirements in advance of the new regime coming into force. It will also ensure that we can set applicants up on the appropriate reporting schedules once their applications have been determined. 

We have also put together a MIFIDPRU supplement form notes document which will help applicant firms complete the MIFIDPRU supplement form. 

We are currently in the process of reviewing our authorisation forms to make sure they reflect the necessary changes ahead of the new regime coming into force. The MIFIDPRU supplement form will also be updated nearer the time in line with our final rules and to ensure consistency with other forms. We will update this webpage to provide more information as our work progresses.

IFPR set-up questionnaire 

We will be sending out a questionnaire to all existing FCA investment firms in November asking for various key information, such as their expected SNI status, investment firm group membership/composition and expected ICARA reporting date. This will provide us with the information we need to set up reporting schedules and update our systems.

We will provide updates on this questionnaire on this webpage and as part of the monthly Regulation Round-up.

Page updates

26/11/2021: Link added Final rules from third policy statement added.
12/11/2021: Link added Link to amendments to IFPR Instrument 2021 added
28/07/2021: Information added MIFIDPRU applications and notifications