Capital requirements for personal investment firms (PIFs)

The new capital requirements for personal investment firms (PIFs), which were published by the Financial Services Authority (FSA), are being deferred for two years and will now come into force on 31 December 2015.

Recent developments have led us to question whether the approach in the new rules remains the most appropriate. In particular, many firms are still implementing changes to their business models as a result of the Retail Distribution Review and the European Banking Authority is undertaking work (the Capital Requirements Directive) for non-PIFs, will be relevant.

Also, we have a competition objective that was not present under the FSA. In their current format we believe the new rules would not necessarily be consistent with that objective. Therefore, we have decided to defer implementation of these rules for a further two years in order to allow a more fundamental review of our proposed approach.