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

CP13/6
CRD IV for Investment Firms
27. As discussed, we estimate that circa 1,000 13 of BIPRU firms will not be subject to CRD IV
due to the proposed exercise by the FCA of the discretion in article 95(2) of the Regulation.
These firms will continue to be subject to existing CRD III capital provisions and will continue
submitting their information in the existing forms. On the other hand, at least 1,400 firms will
need to comply with the new CRD IV reporting framework. Table 15 shows the approximate
distribution of these firms by size 14 and type. 15
Table 15: Approximate number of firms mandated to comply with the reporting
framework 16
Approximate number of firms
Investment
Firm Type Small Mid-Size Large
Totals by
type
Full-Scope 160 30 10 200
Limited
Activity
Limited
License
15 20 5 40
1100 50 10 1160
Total by size 1275 100 25 1400
28. The incremental compliance costs per firm include one-off and on-going costs. Given the
uncertainty of the cost impact on the investment firms affected, the costs are estimated based
on the replies of firms responding to a survey conducted by the FSA. 17 Table 16 and Table
17 show the estimated incremental one-off and annual on-going compliance costs per firm
respectively. The estimates are based on the median costs by firm type and size category.
Table 16: Estimated incremental one-off compliance costs per firm
Costs per firm (£ thousands)
Investment Firm
Type
Small Mid-Size Large
Full-Scope 20 155 350
Limited Activity 10 21 59
Limited License 11 NA 18 30
13 See footnote 11.
14 Firms were categorised into small, mid-size and large firms. Small investment firms are those with assets less than £100 million,
mid-size are those with assets between £100 million and £1billion and large are those with assets above £1 billion. For asset
management firms, assets under management are used instead of total assets but the same thresholds were used.
15 These are approximate figures as we do not record firm’s MIFID activities.
16 The approximate number of firms that will need to comply with the reporting framework is the difference between the total number
of BIPRU firms (see Table 14) and the number of firms that will not be subject to CRD IV due to the discretion in article 95(2). The
approximate figures presented in this table have been rounded up.
17 Approximately 13% of relevant BIPRU investment firms completed a survey conducted by the FSA.
18 Given the small number of firms in this category and the low response rate to this survey, we are unable to estimates the costs for
this size and type of firms due to the lack of representativeness of the data.
66 July 2013
Financial Conduct Authority