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

CP13/6
CRD IV for Investment Firms
Annex 2:
Compatibility statement
Introduction and statement of purpose
1. This Annex sets out our views on how the proposals for transposing the CRD IV in the UK are
compatible with our objectives and the principles of good regulation. CRD IV is a set of reforms
to the EU’s capital requirements regime for credit institutions and investment which consist of
Regulation (EU) No 575/2013 and Directive 2013/36/EU.
Compatibility with the FCA’s objectives and general duties
2. Our planned transposition of CRD IV, as set out in this CP and the draft Handbook text
that accompanies it, aims primarily to meet our integrity objective. However, our consumer
protection and competition objectives are also relevant.
Integrity objective
3. This objective requires us to protect and enhance the integrity of the UK financial system.
4. CRD IV represents the EU’s implementation of the international standards for banks agreed
by the Basel Committee, which materially strengthen the prudential regime. It also applies to
investment firms.
5. Our proposals in this CP and the draft Handbook rules and guidance seek to reduce the risk
of market disruption arising from financial failure of an authorised firm or group of firms. This
is achieved through quantitative and especially qualitative enhancement of the institutions’
capital adequacy.
6. As described in the CBA, the regulatory reforms aim to reduce problems associated with
informational asymmetries and negative externalities as revealed by the financial crisis. Whilst
such problems are particularly associated with the banking sector, the reduction of informational
asymmetries for investment firms’ may also improve market integrity.
Consumer protection objective
7. This objective requires us to secure an appropriate degree of protection for consumers.
72 July 2013
Financial Conduct Authority