CP21/26: A new UK prudential regime for MiFID investment firms

Consultation opens
06/08/2021
Consultation closes
17/09/2021
17/09/2021

We are consulting on the third set of proposed rules to introduce the Investment Firm Prudential Regime (IFPR). IFPR is the new prudential regime for UK firms authorised under the Markets in Financial Instruments Directive (MiFID).

Read CP21/26 (PDF)

Why we are consulting

This is the third set in a programme of Consultation Papers (CPs) and Policy Statements (PSs) that we will issue before the regime takes effect. We expect this to be in January 2022, subject to the Treasury making the necessary secondary legislation under the Financial Services Act (FS Act).

This CP sets out our proposals for changing prudential standards for these firms and you should read it in conjunction with our first PS, PS21/6 (June 2021) and second PS, PS21/9 (July 2021).

Our draft legal rules in this CP also include some non-material additions and amendments to the text from the previous CP, such as updating cross-references and terminology.

The new regime will streamline and simplify the prudential requirements for MiFID investment firms that are prudentially regulated by the FCA in the UK (FCA Investment Firms).

It represents a major change for investment firms. It is critical that firms adequately prepare for the regime.

To accompany this consultation, we are publishing the proposed MIFIDPRU8 disclosure templates and two further proposed notification forms (one covering investment firm group and financial conglomerate notifications and the other a generic MIFIDPRU permissions and notification form where no other application or notification form exists). These can be found at the side of this page. We would welcome any feedback on these in addition to your feedback on this CP.

Who this applies to

The proposed rules will apply to:

  • Any MIFID investment firm currently subject to any part of the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR) including:
    • investment firms that are currently subject to BIPRU and GENPRU 
    • ‘full scope,’ ‘limited activity’ and ‘limited license’ investment firms currently subject to IFPRU and CRR 
    • ‘local’ investment firms 
    • matched principal dealers 
    • specialist commodities derivatives investment firms that use the current exemption on capital requirements and large exposures including: 
      • oil market participants (OMPS) 
      • energy market participants (EMPS) 
    • exempt CAD firms 
    • investment firms that would be exempt from MiFID under Article 3 but have ‘opted-in’ to MiFID
  • Collective Portfolio Management Firms (CPMIs)
  • regulated and unregulated holding companies of groups that contain an investment firm authorised and regulated by the FCA and that is currently authorised under MiFID and/or a CPMI
  • Depositaries

Our proposals on capital requirements for MiFID investment firms acting as depositaries might also be of broader interest to fund managers who appoint them. Prudential Regulation Authority (PRA) designated investment firms may also be affected and so we also welcome comments on our proposals from these firms. 

Next steps

Online response form

We want your feedback on our proposals and issues discussed in this consultation paper. 
Please send us your comments by 17 September 2021.

Page updates

13/08/2021: Information added Links to documents added