CP25/10: Definition of capital for FCA investment firms

Read CP25/10 (PDF)

Why we are consulting

We want to remove all references to the UK Capital Requirements Regulation (UK CRR) from the definition of regulatory capital, also known as own funds, that applies to FCA investment firms within MIFIDPRU 3. 

Many UK CRR rules on own funds were designed for banks, making them complex and not fully aligned with the business models of investment firms.

Our proposals focus on simplifying rules, removing irrelevant provisions and improving clarity, reducing the volume of legal text by approximately 70%. This will help firms better understand and apply the requirements.

Who this applies to

• MIFIDPRU investment firms.
• UK parent entities that are required to comply with MIFIDPRU 3 on the basis of their consolidated situation.
• Parent undertakings subject to the Group Capital Test.

These proposals do not apply to banks or other PRA-regulated entities.

Next steps

Online response form

We’re asking for comments on this CP by 12 June 2025. You can submit your response via the online response form on our website or by:

Emailing: [email protected].

Writing to us at: Prudential Policy, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN.

After reviewing the feedback, we aim to publish our final rules in a Policy Statement in H2 2025. Subject to the consultation outcome, we expect the new framework to come into force on 1 January 2026.

Background

This consultation also helps us deliver on our commitment in PS21/6: Implementation of Investment Firms Prudential Regime. It forms part of a broader programme to move away from reliance on the UK CRR, ensuring that prudential rules are appropriately tailored to investment firms.