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

CRD IV for Investment Firms
CP13/6
Table 3: Key derogations in the CRR and in the Directive by type of firm
Prudential
Category
IFPRU
investment
firm
Exempt
IFPRU
commodities
firm
BIPRU firm
Exempt-
CAD firm
Subcategory
IFPRU
limited
licence
firm
CRR/Directive key derogations
• As IFPRU limited activity firm and in addition:
• CRR article 6(4) excludes these firms from the liquidity
provisions.
• Directive article 128 exempts these firms from the
capital buffers.
• Directive article 51(1)(1) excludes these firms from the
regime for designation of significant branches.
• CRR article 498 excludes from the provisions on own
funds requirements those firms whose main business
consists exclusively of providing investment services or
activities in relation to the financial instruments set out
in points 5, 6, 7, 9 and 10 [commodities derivatives]
of Section C of Annex I to Directive 2004/39/EC and
to whom Directive 93/22/EEC did not apply on 31
December 2006. This exemption shall apply until 31
December 2017 or the date of entry into force of any
modifications, as a result of the Commission’s review by
the end of 2015.
• CRR 493 exempts the large exposure provisions in the
CRR to these firms. This exemption is available until 31
December 2017 or the date of entry into force of any
modifications as a result of the Commission’s review.
• CRD IV requires them to apply the ‘higher of’
requirements in the CRR article 92(3) except for
operational risk or the Fixed Overhead Requirement
(FOR) and to meet the requirements in the CRR articles
92(1) on own funds and (2) on calculation of capital
ratios.
• However, CRR article 95(2) allows CA to keep such firms
on the current CRD, as it stood under national law (i.e.
BIPRU and GENPRU) on 31 December 2013. This would
include the current (less onerous) definition of own
funds, our simplified approach to calculating credit risk
and reporting under GABRIEL (not COREP).
• More details on BIPRU firms in Chapter 6 of this CP.
• Exempt-CAD firms should refer to paragraphs 6.17 and
6.18 in Chapter 6 of this CP.
Proposed
FCA
Handbook 1
January 2014
IFPRU
IFPRU;
IPRU(INV) –
(firms need
to check
the relevant
application
provisions in
the relevant
sourcebooks)
Amended
GENPRU /
BIPRU / SYSC
as of 31
December
2013
IPRU(INV) /
IFPRU
Collective portfolio management investment firms (CPMI)
2.11 Management companies (as defined under the UCITS Directive) and AIFMs (as defined under
the AIFMD) (together CPMI) must meet requirements on initial capital, own funds and fixed
overheads. These terms are currently defined by reference to CAD.
Financial Conduct Authority July 2013
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