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

CP13/6
CRD IV for Investment Firms
4.10 Article 11(3) of the CRR allows competent authorities to exempt investment firms from Part
Six liquidity requirements on a consolidated basis, ‘taking into account the nature, scale and
complexity of the investment firm’s activities.’ Accordingly, we intend to apply COREP liquidity
reporting (and from 2015 binding liquidity requirements) on a consolidated basis to groups
that contain a full scope IFPRU investment firm which meets the definition of significant firms
outlined in Chapter 5 and also exceeds the threshold to be an ILAS firm.
Q10: In your view, is this approach proportional and risk
based? If not, which category or categories of firms
(within the solely FCA regulated CRD IV population) do
you perceive as appropriate to submit CRD IV liquidity
reporting forms from 2014 and be subject to binding
liquidity requirements from 2015?
4.11 Article 508(2) of the CRR requires the Commission to report on whether and how the liquidity
coverage requirement within the CRR should apply to investment firms by 31 December 2015.
4.12 Data from firms’ COREP liquidity submissions will primarily be used to better understand
the liquidity risk profile of the affected firms, and to inform the Commission’s review of the
liquidity regime for investment firms. It would not be used to monitor an enforceable liquidity
requirement until CRR binding liquidity requirements are introduced in 2015 for, as proposed
above, significant full scope IFPRU investment firms that have balance sheets in excess of £50m
net assets.
4.13 In addition, to inform the EU review of the liquidity regime for investment firms, we will
approach some firms caught by our definition of a significant institution that do not meet the
full ILAS criteria to submit these COREP liquidity returns on a voluntary basis. In asking for this
we hope to accumulate liquidity data for a wider range of business models, which can be used
to build an appropriate and proportionate European regime for investment firms. We believe
that this is in the interest of the industry.
4.14 A summary of how the CRD IV liquidity proposals apply to different types of IFPRU investment
firms is outlined in table 8 below:
Table 8
Does IFPRU Chapter
7 apply?
Do existing FSA0xx
liquidity templates
apply?
Does COREP
liquidity reporting
apply from 2014?
Do binding
minimum
requirements apply
from 2015?
A Full scope IFPRU
investment firm
that is identified as
significant and is an
ILAS firm
A Full scope
IFPRU investment
firm that is not
covered in the
first column
An IFPRU
limited
activity firm
Yes Yes Yes Yes
Yes Yes Yes Yes
Yes No No No
Yes No No No
An IFPRU
limited
licence firm
32 July 2013
Financial Conduct Authority