The FCA is streamlining the rules on regulatory capital, also known as own funds, for investment firms.
These rules make sure investment firms can absorb losses and maintain financial resilience[1] during periods of stress.
This move is set to help reduce regulatory burden and make it easier for firms to comply with the rules around regulatory capital. The rules do not change how much capital firms must hold.
The FCA has removed outdated banking provisions and reduced the volume of legal text by 70% from approximately 44,100 to 13,200 words.
These changes will better help firms understand their obligations and focus more resources on their core business, rather than navigating complex capital definitions. The changes take effect on 1 April 2026.
The FCA is grateful for the positive support and engagement from industry to its consultation on the changes.
The reforms align with the government's regulatory reform agenda, including the Edinburgh and Leeds Reforms and deliver on commitments made when the Investment Firms Prudential Regime was introduced in 2022.
This work is part of the FCA’s wider strategy to support growth and underpin the continued competitiveness of the UK’s world-leading financial services. It is also part of the actions the FCA set out to support growth in its letter to the Prime Minster[2].