CP13/6: Capital requirements for investment firms

Why are we consulting on this Consultation Paper (CP)?

CRD IV is the EU implementation of Basel III for banks, which affects approximately 2,400 investment firms that are prudentially regulated by the FCA.

It is split into two sections: the Capital Requirements Regulation (CRR, Regulation 575/2013) and the Capital Requirements Directive (CRD, Directive 2013/36/EU).

The CRR is directly binding on firms as an EU regulation, so the scope of this CP is restricted to transposing the CRD into the FCA Handbook and implementing a limited number of other areas, such as discretions in the CRR.

Who is this CP aimed at?

Our proposals apply mainly to:    

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

Consultation paper 13/6

What are the next steps?

• Online response form

Please send us your comments and/or responses by 30 September 2013. We will consider your feedback and publish a Policy Statement later in 2013 so firms have the final rules available before 1 January 2014.

Want to find out more?

For more information:

• Frequently asked questions
• Legislative acts: CRR - Regulation 575/2013; and CRD - Directive 2013/36/EU.
• Reporting: Harmonised reporting and the recently published draft EBA ITS on supervisory reporting
• Current EBA consultations
• Existing FCA rules and guidance: FCA Handbook