Amendments to the IFPR Instrument 2021 since publishing the near-final version

We set out the amendments that have been made to the original text of the near-final Investment Firms Prudential Regime (IFPR) Instrument. This instrument was originally published in PS21/9 as part of finalising the Investment Firms Prudential Regime Instrument 2021 (FCA 2021/38).  

The tables below only summarises the relevant changes and is not a substitute for firms reading all the detailed rules in the final instrument.

There have been no changes to the substantive content of the Investment Firms Prudential Regime (Consequential Amendments to Other Prudential Sourcebooks) Instrument 2021 (FCA 2021/39) since the near-final version was published.

Please note that a small number of the final rules may be further amended in the policy statement that responds to CP21/26, which firms can refer to for our proposals in this area.

 

Relevant provision Description of amendment(s)
Glossary definition of 'UK parent investment firm' 

Amendment of limb (2) of the definition to:

  • add in a reference to the MIFIDPRU investment firm being the deemed parent undertaking of a relevant financial undertaking for the purposes of MIFIDPRU 2.5, which therefore captures the connected undertaking relationships that result in deemed parent status
  • add in references to ancillary services undertakings, tied agents and credit institutions as entities that may be subsidiaries, in which the MIFIDPRU investment firm may hold a participation, or of which the MIFIDPRU investment firm might be a deemed parent. Note, however, that if the group contains a subsidiary that is a UK credit institution, then the group will not be an investment firm group

This will ensure that the connected undertaking deeming relationships operate as intended in the drafting in MIFIDPRU 2.4 and 2.5.

MIFIDPRU 4.14.1R(2)(b) and 4.14.2G 

The rules relating to the K-TCD requirement make clear that they are intended to apply to various types of securities financing transactions (SFTs). However, the drafting of the original overall application rule for the K-TCD section could have resulted in the requirement not applying to SFTs by inadvertently limiting the scope of the requirement to transactions in a firm’s trading book. This was not intended.

We have therefore updated the drafting of the rule to clarify that the K-TCD requirement applies not only to derivative transactions in a firm’s trading book, but also to any SFTs and long settlement transactions entered into by a firm with permission to deal on own account (even if those SFTs or long settlement transactions are not recorded in the trading book). 

MIFIDPRU 7.9.5R(5)  This provision erroneously referred to a notification requirement in MIFIDPRU 7.7.13R. That reference has been updated to refer to MIFIDPRU 7.7.14R, which contains the relevant notification requirement. 
MIFIDPRU 9 Annex 2G (Guidance notes on data items in MIFIDPRU 9 Annex 1R): MIF002 guidance notes The guidance notes for items 7A to 9A have been updated. These previously erroneously referred to these items as items 8A to 10A, which reflected the numbering on an earlier version of the reporting form.

MIFIDPRU 9 Annex 2G (Guidance notes on data items in MIFIDPRU 9 Annex 1R): 

MIF007 guidance notes

The guidance note for item 69A in the MIF007 guidance notes has been updated to refer to item 69A being completed only where item 68A has been answered yes. The original text erroneously referred to item 64A instead. 

The guidance note for item 70A in the MIF007 guidance notes has been updated to refer to item 71A being completed only where item 70A has been answered yes. The original text erroneously referred to items 67A and 66A respectively. 

MIFIDPRU TP10.2R(4)(a) and MIFIDPRU TP 10.9G This rule and its corresponding guidance provision have been updated to confirm that for the purposes of the transitional in MIFIDPRU TP10 relating to individual capital guidance, any amounts relating to capital planning buffers or other CRD IV buffers required under IFPRU 10 should be included in the transitional requirement. 
SUP 16.12.17R

Deletion of MLA-M row for reporting frequency rules.

No MLA-M report is scheduled under the corresponding substantive rule in MIFIDPRU 16.12.16R. The reference to MLA-M in the frequency table in SUP 16.12.17R was therefore an error that has now been corrected.

Application and notification forms

These are contained in various annexes to the chapters containing the main rules and have been updated to make the information that we require clearer to firms. Certain updates also reflect operational and administrative requirements for capturing data within the FCA’s systems. These updates include:

  • clarifying when a form can be used to make a notification in relation to a consolidation group and providing additional fields to identify this
  • adding an additional field to identify the relevant UK parent entity, where applicable
  • adding additional fields to confirm specific information required by particular underlying rules

These updates are administrative in nature and are designed to capture more accurate data relating to the requirements of the substantive underlying rules.