Consultation closed
17/09/2021
Policy statement
26/11/2021
26/11/2021
This is the third in a series of policy statements that set out our rules to introduce the UK Investment Firm Prudential Regime (IFPR).
Introducing the IFPR means that there will be a single prudential regime for all FCA investment firms. It should reduce barriers to entry and allow for better competition between investment firms.
In line with our objectives and Mission, the IFPR will refocus prudential requirements and expectations away from the risks the firm faces, to also consider and manage the potential harm the firm itself can pose to consumers and markets.
This is the third in a series of policy statements on the IFPR.
We published CP20/24 in December 2020 and the accompanying PS21/6 in June 2021. We published CP21/7 in April 2021 and the accompanying PS21/9 in August 2021. We published CP21/26 in August 2021 and this third policy statement completes our rules for introducing IFPR.
When the UK was a member of the EU, we were heavily involved in the policy discussion to create the Investment Firm Directive (IFD) and Investment Firm Regulation (IFR). We support the aims of the EU’s IFD and IFR. The IFPR will achieve the same overall outcomes.
However, we are introducing our regime after the UK has exited the EU. We believe it is right that we consider any appropriate changes to account for the specifics of the UK market and our duties to have regard to certain factors, including those set out in the Financial Services Act 2021 (FS Act).
Our baseline approach is for consistency with the EU regime, unless we have specific reasons for diverging to reflect the nature of the UK market or otherwise comply with our duties under Part C of FSMA (as inserted by the FS Act).