Important Changes to Capital Adequacy – A Reminder for Smaller Firms

Since we are coming to the end of the transition year following the change to capital adequacy requirements we thought it appropriate to remind firms that the final rule comes into effect on 30 June 2017. 

See our previous news article here /news/capital-adequacy-requirements/ for confirmation of what it will mean for your firm. 

Put briefly – if your annual income is less than £400,000 your prudential requirement will be a minimum of £20,000 from 30 June 2017. 

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

Firms need to have a clear understanding of what their new prudential requirements will be

Action Required By You

  • Ensure you meet, or have plans to meet the new requirements;
  • Remember, you must maintain sufficient resource at all times, so we recommend that you build in a contingency surplus;
  • If your base figure was £15,000 from 30 June 2016 it will be at least £20,000 from 30 June 2017;
  • Add any additional figures for PI exclusions and excesses to the output.

ATEB clients should speak with their account manager as necessary; otherwise contact ATEB here to find out how we can help.

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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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