Waiver: Committee waivers

Find out more about committee waivers.

Since 1 January 2014, a firm that is deemed 'significant' is required to have in place a risk committee, a remuneration committee and a nomination committee with each committee complying with requirements prescribed in the Capital Requirements Directive (2013/36/EU) (CRD IV).

We have deemed that a firm is a significant IFPRU firm if at any time it exceeds one of the thresholds in IFPRU 1.2.3R (reproduced below) which only apply to IFPRU firms:

Indicator

Threshold

Total assets

£530 million

Total liabilities

£380 million

Annual fees and commission income

£160 million

Client money

£425 million

Client assets

£7.8 billion

The Prudential Regulation Authority has its own thresholds for deeming a firm significant.

A significant IFPRU firm may apply to the FCA to waive any one or more of the thresholds in IFPRU 1.2.3R if it believes that one or more of the  requirements for such committees that apply to significant IFPRU firms may be disproportionate to it.

The requirements are:

  • SYSC 4.3A.8R on the nomination committee
  • SYSC 7.1.18R on the risk committee
  • SYSC 19A.3.12R on the remuneration committee

The effect of such a waiver is that a firm would not be a significant IFPRU firm only for the purpose of the particular committee  that the waiver applies to. It is important to note that even with a waiver, the firm is still a significant IFPRU firm for the purposes of all other rules in the Handbook that apply to a significant IFPRU firm.

In submitting an application, we expect firms to demonstrate that as part of a group, in the context of the internal organisation of that group, and taking into account size, nature, scope and complexity of its activities, it should not be considered as significant. 

You should include the following information in support of your application:

  • Business type/model
  • Market share by business line
  • Number of employees
  • If the firm is relying on risk, remuneration or nomination committees or other governance arrangements that perform similar functions as those committees constituted at group level or elsewhere in the group please provide/ confirm:
    • a group structure chart clearly showing where these committees/ functions sit, and which entities in the group they cover
    • to what extent the group committees / functions map across to the CRD IV requirements
    •  confirmation of the membership of each committee / function, detailing each member’s role
    • how  frequently the committees meet / functions performed.
  • Please note, if you are relying on committees/alternative governance arrangements elsewhere in the group, we expect the Terms of Reference to specifically mention the firm. Please provide copies of this with your application. 
  • If the governance arrangements are in place at the level of the firm, please summarise them, drawing out why you consider they are adequate to address the risks the business runs, taking into account size, nature, scope and complexity of your activities. 

The above is not exhaustive and you should submit any information you feel is relevant to your application.

IFPR

Please note that on 1 January 2022 a new prudential regime for UK investment firms authorised under MIFID (the Investment Firm Prudential Regime (IFPR)) will come into force.

This means: 

  • the majority of existing waivers and modifications to prudential rules in the FCA handbook will no longer apply
  • the majority of existing CRR permissions will no longer apply to FCA investment firms
  • the new rules contain transitional provisions that give some existing waivers and permissions status under the new regime − firms should consider the transitional provisions in the IFPR rules for more details
  • firms will need to consider applying for permissions, or rule waivers and modifications, of rules in the new sourcebook (MIFIDPRU)

Find out more about IFPR.

Page updates

27/07/2021: Information added Investment Firms Prudential Regime (IFPR)