Prudential rules for MiFID investment firms (IFPR)

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The UK has a new prudential regime for MiFID investment firms, which applies from 1 January 2022.

The FCA’s Investment Firms Prudential Regime (IFPR) introduces significantly more detailed and burdensome rules on capital and liquidity, governance, reporting and remuneration for UK “exempt CAD” (also known as “adviser arranger”) firms and collective portfolio management investment (“CPMI”) firms carrying out certain MiFID investment services (such as AIFMs with MiFID “top up” permissions relating to segregated investor mandates). Several aspects of the FCA’s rules go beyond the requirements of their EU equivalents under the Investment Firms Directive and Regulation, on which IFPR is modelled.

The FCA has published Policy Statements setting out the framework’s near-final rules, following three public consultations that the BVCA responded to during 2021. We have also engaged extensively with affected members, with HM Treasury on both the detail of the regime and its legislative foundation, (during the passage through Parliament of the Financial Services Act 2021) and with EU policymakers via Invest Europe during the development of the original EU framework.

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