Final Rules UK IFPR – are you ready?

By Kyte Ekstrom | FCA Regulation, FinTech, Investment | 0 Comments

FCA Publishes Third Policy Statement (PS21/17) – Final Rules UK IFPR

The final rules have been made in order to streamline and simplify prudential requirements for solo-regulated UK firms authorised under the Markets in Financial Instruments Directive (MiFID) regime.

The rules form part of the FCA’s Investment Firms Prudential Regime (IFPR), and contain minor updates to the near-final rules published in the FCA’s first two policy statements on the IFPR published earlier this year (PS21/6 and PS 21/9).

The FCA has also published the following materials:

Investment Firms Prudential Regime Instrument 2021 (FCA 2021/38)

  • this contains the text of the new prudential sourcebook for MiFID Investment Firms (MIFIDPRU) and the MIFIDPRU Remuneration Code, set out in the Senior Management Arrangements, Systems and Controls (SYSC) sourcebook.

Investment Firms Prudential Regime (Consequential Amendments to other Prudential Sourcebook Instrument 2021 (FCA 2021/39)

  • this revokes the Prudential sourcebook for Banks, Building Societies and Investment Firms (BIPRU) and most of the Prudential sourcebook for investment Firms (IFPRU).

Finalised Guidance: General guidance on the application of ex-post risk adjustment to variable remuneration (FG21/5)

  • this sets out the FCA’s expectations of the way in which firms should comply with requirements in SYSC 19D and SYSC 19G on ex-post risk adjustment, including malus and clawback.

The instruments and finalised guidance come into force on 1 January 2022, except one MIFIDPRU transitional provision, which will come into force on 1 December 2022.

The FCA has also published templates for firms Remuneration Policy Statements (RPS), which is designed as a tool for firms to document their remuneration policies and practices, and templates for material risk takers (MTRs), which is intended for use by firms to record their assessment of which staff are identified as MTRs, as required by SYSC 19G.

The FCA reminds firms to make the necessary preparations to be able to comply with the requirements, and to return the answers to the questionnaire that was sent out on 12 November 2021. The FCA also reminds firms that, under MIFIDPRU (the prudential sourcebook for MiFID (Markets in Financial Instruments Directive (2004/39/EC)) Investment firms) TP5, they must begin collecting data on K-factor metrics that are relevant to the activities they undertake by no later than 1 December 2021.

The IFPR will come into force on 1 January 2022.

FCA Policy Statement: Implementation of Investment Firms Prudential Regime (PS21/17)

Webpage: PS21/17

Investment Firms Prudential Regime (No 2) Instrument 2021 (FCA 2021/49)

Investment Firms Prudential Regime (Consequential Amendments) Instrument 2021 (FCA 2021/50)

Technical Standards (Financial Conglomerates Directive) (Amendment) Instrument 2021 (FCA 2021/51)

Webpage: Investment Firms Prudential Regime (IFPR)

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