FCA Consultation Paper: Capital requirements for investment firms

31 July 2013

This Consultation Paper sets out proposed changes to the FCA Handbook as a result of the transposition of CRD IV in relation to a large number of investment firms prudentially regulated by the FCA, and subject to the Capital Requirements Directive. Deadline for comments is 30 September, 2013.

The proposals apply mainly to:    

1. Investment firms that are currently subject to the CRD including:

• firms that benefit from the current exemptions on capital requirements and large exposures for certain commodities derivatives firms
• firms that only execute orders and/or manage portfolios, without holding client money or assets

2. Other firms in the investment sector (including exempt-CAD firms and collective portfolio management investment firms) subject to certain CRD IV provisions 

The proposals in the paper do not apply to credit institutions (banks and building societies) or investment firms supervised by the PRA.  

The Quantitative Impact Study (QIS) on Institutions for Occupational Retirement Provision (IORPs) ran between mid-October and 17 December 2012 in eight member states. The QIS exercise represented a first comprehensive attempt to calculate prudential balance sheet and solvency figures on a common and consistent basis for defined benefit IORPs in Europe. EIOPA published the final report with the outcomes of the QIS, together with this discussion paper.

The deadline for  comments and/or responses is 30 September, 2013. FCA will publish a Policy Statement later in 2013 so firms have the final rules available before 1 January, 2014.

Full Consultation Paper

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