On 15 October 2025, the Financial Conduct Authority (FCA) published Policy Statement 25/14: Definition of capital for FCA investment firms (PS25/14).
Background
On 24 April 2025, the FCA published a consultation paper, CP25/10, on the definition of capital for FCA investment firms.
The FCA proposed to amend the definition of regulatory capital (also known as own funds) that applies to FCA investment firms within MiFIDPRU 3, including:
- Consolidating requirements into MiFIDPRU 3.
- Removing all references to the UK CRR from the definition, so that provisions that are only relevant for banks are no longer part of the definition.
- Making requirements clearer and more accessible for investment firms.
No changes were proposed to the levels of regulatory capital that firms are required to hold and the FCA emphasises that firms will not be expected to adjust their capital arrangements as a result of the proposals.
Final policy
The FCA reports in PS25/14 that most respondents supported the consultation proposals, agreeing that consolidation into MiFIDPRU would improve accessibility and reduce unnecessary complexity without lowering prudential standards. As such the FCA has moved forward and finalised its proposals as consulted on with certain amendments in light of respondents raising some technical issues which are addressed in chapter 2 of PS25/14.
Next steps
The new rules will come into effect on 1 April 2026.
The FCA does not expect firms to change their capital arrangements because these reforms maintain existing capital standards and eligibility criteria. However, firms may need to consider the clarifications provided and update internal documents with new rule references.