FCA extends IFPR notification deadline

The deadline has been extended for firms to notify the FCA if they want to treat their existing capital instruments as own funds under MIFIDPRU 3. The proposed deadline extension of what’s known as the TP 7 notification is part of the regulator’s quarterly consultation paper (CP22/4). The original deadline for TP 7 notifications was 1 January 2022 to coincide with the launch of the new Investment Firm Prudential Regime (IFPR). FCA has now proposed to extend this until 29 June 2022.

MIFIDFRU TP 7.4R(2)(b) was designed to avoid the FCA expending significant resources processing approvals for pre-existing capital instruments and to ensure that firms were not in breach of the MIFIDPRU 3 requirements on 1 January 2022. The TP 7 notification is a ‘self-certification’ approach  which relies on senior management to take responsibility. Firms must notify the FCA if they want to treat their existing capital instruments as own funds under MIFIDPRU 3.  Firms will technically have zero own funds, unless and until they obtain formal FCA approval using the standard processes in MIFIDPRU 3.

This stay of execution is a useful lifeline for firms. It’s vital before the new June deadline to check your firm’s permission, pre -authorisation, and notification. Here’s a reminder of the criteria:

  • A former IFPRU investment firm with existing UK CRR own funds approvals and capital instruments that satisfy the substantive MIFIDPRU 3 conditions does not need to take any action to treat the existing CET1 and T2 instruments as own funds under MIFIDPRU 3.
  • All other firms with no former UK CRR own funds approvals (including BIPRU firms and UK CRR consolidating parent without existing UK CRR approvals for consolidated own funds) even if they meet the substantive underlying conditions in MIFIDPRU 3, should notify the FCA under MIFIDPRU TP 7 by no later than the new deadline of 29 June 2022.
  • FCA investment firms must make this notification through Connect using the form MIFIDPRU TP7 Annex 1R
  • A parent undertaking that is not regulated by the FCA should return the form to ifprquery@fca.org.uk

How we can help

Our specialist prudential team are working with a variety of investment firms to help them get ready for IFPR reporting. We can help in a number of areas including:

  • Reviewing your firm’s permissions to see whether you need to be subject to IFPR- MIFIDPRU TP 7.4R(2)(b) notification.
  • Reviewing existing capital instruments as own funds under MIFIDPRU 3
  • Helping on the application.

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