The new Investment Firm Prudential Requirements (IFPR) are coming into force in less than a year’s time. Although the underlying principles of ensuring adequate capital and liquidity resources remain the same, there are significant differences in the conceptual approach since the new regime is designed specifically for investment firms, rather than being adapted from the regime for credit institutions. In particular, there is an entirely new approach to the Pillar 1 own funds requirement and new minimum liquidity requirements for all firms. In addition, the approach to risk assessment under ICARA (the ICAAP replacement) must be undertaken using a new perspective based on harms to client and markets rather than through the lens of the EU Capital Requirements Regulation risk categories. This perspective must also be reflected in the firm’s strategic plans and risk appetite—indeed, it will be hard for firms to show that they comply with the new regulations unless these reflect the new approach.
I have been providing specialised capital and financial adequacy training and advisory services to the investment management industry for the last four years, based on my personal experience of developing ICAAPs and engaging with the FCA during three SREP reviews. During this time, nearly 500 people have attended my courses and I achieve consistently high ratings for both content and delivery.
Navigating the new concepts and understanding how these relate to the old approach is not a trivial exercise. Further, there are a number of areas that may have a negative impact on firms, depending on the nature and structure of their business model, and these need to be identified. Based on a detailed analysis of the FCA’s new requirements, I can provide customised training at any level of your firm, from the board down. My approach is designed to explain capital and liquidity adequacy concepts in line with the new regulations; to clarify the ICARA approach; and to show how to move from ICAAP to ICARA.
Training and advice can be customised to your specific requirements, focussing on the areas that you would find most useful. Examples of my previous training work include: full-day training courses for large groups (up to 20 attendees); half-day specialised training for specific groups (e.g. operational risk committee); and financial adequacy concepts/FCA expectations for boards. Examples of my advisory work include: ICAAP review; FCA SREP preparation and response to ICG; workshop facilitation; and board risk governance effectiveness review. I have also provided on-going expert advice and support to senior staff responsible for ICAAP delivery over an extended period—this enables issues to be dealt with quickly, but avoids the expense of engaging full-time consulting staff or contractors.