CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

CRD IV for Investment Firms
CP13/6
1.18 Broadly, the Regulation and the Directive cover the following items:
Table 1
Regulation
(Highly prescriptive, applies directly)
• Own funds and capital requirements including
transitional provisions
• Credit, operational, market risks
• Large exposures
• Liquidity
• Leverage
• Disclosures
Directive
(Less prescriptive, application requires
transposition into UK law)
• Access to taking up/pursuit of business
• Prudential supervision
• Capital buffers
• Corporate governance
• Remuneration policies
• Sanctions
Implementation in the UK
1.19 The FCA is the competent authority for nearly all investment firms under CRD whereas the PRA
is responsible for credit institutions as well as a number of investment firms ‘designated’ for
prudential supervision by the PRA. Accordingly, CRD IV will need to be transposed in the UK
by both the FCA and the PRA for their respective firms. The FCA and the PRA are cooperating
closely in this process.
1.20 This CP sets out our proposals for implementing changes brought about by CRD IV which
can be done through the FCA Handbook of rules and guidance under existing FSMA powers.
Her Majesty’s Treasury (Treasury) intends to publish a separate consultation document in due
course for those aspects of the Directive and the CRR that require either new, or amendments
to existing, legislation in a number of areas to enable the FCA to operate provisions in CRD
IV effectively. Where relevant we will take account of the Treasury’s developing work on
implementation of CRD IV in deciding how to finalise our own rules.
FCA’s overall approach to CRD IV transposition
1.21 When formulating our proposals for CRD IV consultation, our approach has been guided by
the following principles:
• ‘legal minimum’: to ensure that our CP delivers the minimum Handbook rules and guidance
that FCA must put in place for the UK to discharge its legal duty to transpose CRD IV;
• ‘intelligent or even strict copy-out’: to avoid placing any additional burdens upon firms;
• ‘pragmatic and proportionate’: in general and in respect to current standards, using the more
favourable, or least unfavourable, treatment for firms available under national discretions
and relief under transitional provisions – where allowed by CRD IV and in accordance with
the FCA’s objectives;
• ‘minimise the need for changes’ (including systems): and hence minimise the (non-capital)
costs for firms 1 ; and
1 More details of the impact of our proposals can be found at:(i) for consumers under the section headed ‘Is this of interest to
consumers’ in chapter 1; and (ii) on competition in Annex 1.
Financial Conduct Authority July 2013
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