Investment Firm Prudential Regime (IFPR)

In January 2022, the UK adopted a more proportionate and fit-for-purpose prudential regime for investment firms known as the Investment Firms Prudential Regime (IFPR). The IFPR requires applicable firms to complete an internal capital adequacy and risk assessment (ICARA) process to assess their capital and liquidity requirements for mitigating harm.

As the regime has been embedded, the FCA has been performing a series of reviews on how firms are implementing the IFPR in relation to the ICARA process. These reviews have highlighted a number of poor practices across firms and wider challenges that firms face in ensuring compliance with regulatory expectations.

How can we support you with the Investment Firm Prudential Regime?

We can support you and your firm with the following:  

  • Preparing an ICARA process: Forvis Mazars will assist firms in all aspects of preparing an ICARA process, including performing capital and liquidity planning, risk of harm assessments, stress testing, recovery planning and wind-down planning.
  • Reviewing an ICARA process: Forvis Mazars will assist firms with reviewing their ICARA documentation to ensure compliance with the FCA’s regulatory expectations and industry best practices. 
  • Advising on changes to an ICARA Process: Forvis Mazars can provide bespoke advice to business changes that may impact a regulated firm’s ICARA process. This includes assisting firms with changes to their group structure and whether this will impact their requirements to perform the Group Capital Test (GCT) or perform Prudential Consolidation. We also can advise firms on how to adequately address and document changes in their ICARA from the introduction of new products or risks.
  • IFPR Regulatory Reporting: Forvis Mazars will assist firms in completing their regulatory reporting submissions to the FCA (MIF001- MIF008). This includes populating the regulatory returns for firms directly as well as reviewing firms regulatory reporting submissions and associated governance and controls to ensure alignment with reporting instructions, underlying regulations and industry best practice. 
  • IFPR Remuneration : Forvis Mazars will assist firms with reviewing their remuneration arrangements and ensuring alignment to regulatory requirements and guidance in MIFIDPRU and other regulatory documentation.

Client case study

A MIFIDPRU Investment Firm Group approached our team to prepare their ICARA process prior to their first MIF007 (ICARA assessment questionnaire) submission to the FCA. The deadline for the MIF007 submission provided tight timelines to prepare the ICARA documentation from start to finish.

Our team utilised the Investment Firm Group’s previous ICAAP submission and latest audited financial accounts and developed an ICARA document template to comply with the IFPR rules in MIFIDPRU and align with our observations of industry best practice. In developing the ICARA, our team had frequent meetings and discussions with senior management across the Investment Firm Group to ensure the assessments were tailored to the size, complexity, risk profile and operations of the Investment Firm Group.

Our team performed and documented capital and liquidity planning, a risk of harms assessments, stress testing, recovery planning and wind down planning. The team also developed bespoke aspects of the ICARA to align with industry best practice, such as developing a communication plan for wind-down.

The engagement resulted in the ICARA being fully documented, reviewed by senior management and the MIF007 submitted prior to the regulatory deadline. The FCA raised no regulatory findings or concerns to the Investment Firm Group following their submission. The Investment Firm Group provided very positive feedback for the quality of the work performed and meeting the required deadlines

Get in touch

Our experienced prudential regulation and risk management specialists team draws upon their detailed understanding of prudential changes, regulatory expectations, and best practices to provide high-quality services tailored to support your transition to IFPR.

Contact us today

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