On 22 October 2021, the Financial Conduct Authority (FCA) published a press release regarding Investment Firms Prudential Regime (IFPR) final rules.

The rules aim to streamline and simplify prudential requirements for solo-regulated UK firms authorised under the Markets and Financial Instruments Directive (MiFID). It will focus requirements and expectations away from the risks faced by firms, to also consider and look to manage the potential harm firms pose to consumers and markets.

The final rules can be found in the legal instruments – FCA 2021/38 and FCA 2021/39.

The IFPR will apply to the following:

  • MiFID investment firms authorised and regulated by the FCA;
  • Collective Portfolio Management Investment Firms; and
  • regulated and unregulated holding companies of groups that contain either of the above.

The IFPR will not apply to PRA designated investment firms. These will remain subject to prudential supervision by the PRA.

All investment firms to which the IFPR applies must prepare for the regime, which will come into force 1 January 2022.

A third policy statement will be published end of 2021