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

CRD IV for Investment Firms
CP13/6
We are proposing that only firms captured by this definition of ‘significant’ must
comply with the relevant requirements in the CRD IV provisions. However, other firms
may also wish to consider adopting these requirements as a matter of good practice.
5.4 Should a firm exceed a threshold and be caught by this definition, and then drops below the
threshold at a later date, we propose that these rules continue to apply for one year from
the date at which the firm drops below the relevant threshold. This is to prevent arbitrage, to
reduce the incentive to structure a business model to avoid regulatory scrutiny and to provide
an element of continuity.
Q21: Do you agree with our proposal to publish an objective
criteria identifying which firms these policies refer to?
If not, please explain why not and propose alternative
approaches and the rationale for those approaches.
The methodology
5.5 The approach is designed to identify ‘significant’ firms using five pre-defined risk parameters.
Collectively, these act as a proxy for a firm’s significance in terms of size, internal organisation
and nature, scope and/or complexity of their activities. These are:
• total balance sheet assets;
• total balance sheet liabilities;
• annual fees and commission income;
• client money; and
• client assets.
Q22: Do you agree that the combination of these metrics
sufficiently capture the size, internal organisation and
nature, scope and complexity of an investment firm’s
activities? If not, please explain why not and propose
alternative approaches and the rationale for those
approaches.
Financial Conduct Authority July 2013
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