On 5 July 2021, the PRA published Consultation Paper 15/21: Designating investment firms (CP15/21).
In CP15/21 the PRA sets out proposals to make minor changes to its policy on designating investment firms. In particular, the PRA is proposing to amend the Statement of Policy ‘Designation of investment firms for prudential supervision by the PRA’ to:
- Reflect HM Treasury’s proposed amendments to the Financial Services and Markets Act 2000 (PRA-regulated Activities) (Amendment) Order 2021, including the change in the scope of the firms that can be designated.
- Explain that there will usually be six months, rather than three months, between the Prudential Regulation Committee designating an investment firm and it becoming PRA-regulated.
- Note that the PRA will take into account whether or not an investment firm is a clearing member of a central counterparty offering clearing services to other financial institutions (that are not clearing members themselves) when making a designation decision.
- Delete any obsolete text and make other minor textual amendments.
The PRA also sets out proposals to change the Definition of Capital Part to increase the base capital resources requirement for designated investment firms from €730,000 to £750,000 and to denominate it in Sterling.
The deadline for responding to CP15/21 is 5 October 2021.
When finalised the changes would come into effect on 1 January 2022.