On 27 July 2021, the FCA updated its webpages on authorisation for wholesale investment firms and capital requirements permissions. The update relates to the Investment Firm Prudential Regime (IFPR) which comes into force in the UK on 1 January 2022.

On the webpage on authorisation for wholesale investment firms the FCA has added the following text:

The Investment Firms Prudential Regime (IFPR) will come into force on 1 January 2022, impacting all UK investment firms authorised under MIFID.

Any firm submitting a new authorisation or VOP application should consider the requirements that would arise, if approved, under this new regime. During the application process we will expect applicants to demonstrate to us how they will meet their ongoing requirements under the current and new prudential regimes, as part of our threshold conditions assessment.

Find out more about IFPR.

We cannot guarantee that any application received at this stage will be determined before the expected start date of IFPR. We remind firms that the application of some of the transitional provisions in the IFPR will be determined by the prudential categorisation of a firm as of 31 December 2021. Firms should therefore consider the transitional provisions in the IFPR rules.

On the webpage dealing with capital requirements permissions the FCA has added the following text:

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)

The FCA has also published the following forms:

• Application for Authorisation MIFIDPRU Supplement Form
• Individual exemption from liquidity requirements in MIFIDPRU 6 for FCA investment firms in consolidated CRR or MIFIDPRU groups
• Application under MIFIDPRU 2.5.19R for exemption from consolidated liquidity requirements
• Application under MIFIDPRU 2.5.34R(2) for permission to use offsetting positions when calculating K-NPR on a consolidated basis
• Application under MIFIDPRU 2.4.17R for permission to apply the group capital test to an investment firm group instead of prudential consolidation
• Application for Authorisation MIFIDPRU Supplement Form – Notes
• Application under MIFIDPRU 3.3.3(1)R for permission to classify an issuance of capital instruments as common equity tier 1 (CET1) capital