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.
Subject to the Treasury making the necessary secondary legislation under the Financial Services Act, we expect the new regime to come into force on 1 January 2022.
CP21/26 is open for responses until 17 September 2021.
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 subsequent near final rules when published, so you are ready to meet the expected 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.
- Permission under MIFIDPRU 2.3.2R to be exempt from individual liquidity requirements in MIFIDPRU 6 for firms in a consolidated group
- Permission under MIFIDPRU 2.4.17R to apply the group capital test to an investment firm group instead of prudential consolidation
- Permission under MIFIDPRU 2.5.19R to be exempt from consolidated liquidity requirements
- Permission under MIFIDPRU 2.5.34R(2) to use offsetting positions when calculating K-NPR on a consolidated basis
- Permission under MIFIDPRU 2.5.40R to include a portfolio of a designated investment firm in a consolidated K-CMG requirement
- Permission under MIFIDPRU 2.5.41R to include a portfolio of a third country entity in a consolidated K-CMG requirement
- Permission under MIFIDPRU 4.13.9R to apply K-CMG to a portfolio, instead of K-NPR
- Permission under MIFIDPRU 4.14.6R to exclude transactions with some counterparties from K-TCD requirement
- Permission under MIFIDPRU 3.3.3(1)R to classify an issuance of capital instruments as common equity tier 1 (CET1) capital
We will make the remaining application forms and all notification forms available in the autumn. Please see chapter 15 of CP 21/7 for the details of these forms. In our forthcoming CP we will be consulting 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 the autumn 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.