The new prudential regime for investment firms: key points from the latest UK developments

The new prudential regime for investment firms: key points from the latest UK developments

Financial Services analysis: Partners Ash Saluja and Sam Robinson, Senior Associate Tom Callaby and Associates Yasmin Johal and Maggie Lund of CMS discuss the recent statements and discussion paper from the UK government, HM Treasury and Financial Conduct Authority (FCA) on the UK’s approach to the new prudential regime for investment firms due to come into force in the UK from Summer 2021.

HM Treasury, FCA and UK government views on the new prudential regime for investment firms

On 23 June 2020, the UK government, HM Treasury and the FCA published a number of statements and papers on financial services, including in relation to the new prudential regime for investment firms, which is now expected to come into force in the UK by Summer 2021.

  • the UK Parliament published a Written Statement (HCWS309) from the Chancellor of the Exchequer, Rishi Sunak, which provides a high level update on the UK government’s post-Brexit approach to certain EU-level reforms that are currently in progress
  • HM Treasury published a Policy Statement providing an update on its approach to legislating for new prudential standards in the forthcoming Financial Services Bill
  • the FCA published its initial views on the EU Investment Firms Regulation (IFR) and the Investment Firms Directive (IFD) and requests industry feedback on the design of an equivalent UK regime in a Discussion Paper (DP20/2) (the DP). The FCA is asking for comments and/or responses to the questions raised in the DP by 25 September 2020, ahead of a Consultation Paper which we expect to set out proposed changes to the FCA Handbook later in 2020

In this article we highlight some of the key points from these papers, which should be helpful for investment firms that are currently planning for the

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