96% of Firms Unprepared for the FCA’s New Prudential Regime
With less than six months to go until UK investment firms are subjected to a completely new prudential regime, a recent survey from ACA Group, reveals that the industry is vastly underprepared.
The data shows that just 4% of respondents are ready and capitalised for the FCA’s new Investment Firm Prudential Regime (IFPR) coming into effect in January 2022. Within IFPR, there are many new requirements and enormous complexity. Firms need to investigate how changes to scope, capital, liquidity, reporting, group consolidation and other areas will impact them.
For certain firm types, this will mean an increase in capital requirements, and for all firms that fall within the remit, the changes will require significant review of detailed obligations that must be properly actioned in order to ensure compliance.
Yet, despite the onus placed on those newly in scope, survey results suggest that 41% of firms are taking a ‘wait and see approach’. Meaning that, although they are staying informed, they are awaiting the conclusion of the UK FCA consultation process to begin implementation. It should, however, be borne in mind that the conclusion of the consultation phase and the actual implementation is rather short.
Bobby Johal, Managing Director, ACA Group, said “This is not a simple undertaking – and so it’s crucial that firms understand that preparations for the IFPR cannot happen overnight. In fact, for firms waiting until October or November to make a start, we would strongly advise bringing that timeline forward.
“Taking a ‘wait and see approach’ is a high-risk strategy. We recommend that firms endeavour to address how this new prudential capital framework will impact them and begin to plan now for their capital and compliance resource needs.
“Firms should take a step-by-step approach to the changes and embedding them into financial controls and compliance frameworks is essential. It is possible to comply with the changes whilst causing minimal disruption to your business – but only if you act now.”
Findings are based and poll findings taken at our 2021 European Regulatory Horizon Conference.
How we help
Our experienced prudential team are on hand with a wide range of solutions designed to help make your IFPR and regulatory reporting obligations as simplified and seamless as possible. Complete this form or call +44 (0) 20 7042 0500 to connect with us.
We can help you with:
Understanding the new rules: The FCA has already published one Discussion Paper and two Consultation Papers on IFPR, to be followed shortly by a 3rd Consultation Paper and a final Policy Statement. Rooted in a firm grasp of the detail and underlying objectives of the new regime, our IFPR Implementation Planner and other briefing documents boil these requirements down to the essential details.
Implementing the changes: We will take you step-by-step through embedding the changes into your financial control and compliance frameworks. This will include documentation such as the new ICARA and regulatory reporting formats, revised remuneration policies, plus supporting compliance and monitoring collateral. Our aim is to support you through the changes whilst causing minimal disruption to your business.
Regulatory reporting: ACA offers a comprehensive reporting solution that addresses all your FCA obligations on an on-going basis.
For more information
ACA – Europe
Gobnait Will, Senior Marketing Manager
+44 (0)7825 943522