New Capital Resource Requirements – ATEB’s Final Warning!

We thought it would be prudent to send one final reminder regarding the change to the Capital Resource Requirements that come into force 31/12/13. 

The new capital requirements under IPRU for Personal Investment Firms (PIF’s) to be implemented over a three year period are:

Deadline EBR Minimum Requirement
31 December 2013       1 month (4 weeks)       £15,000
31 December 2014 2 months (8 weeks) £15,000
31 December 2015 3 months (13 weeks)      £20,000

EBR is your ‘Expenditure Based Requirement’ i.e. the amount of fixed expenditure you need to hold as capital. The calculation is not straightforward so please speak to your ATEB consultant if you are unsure.

Note the changes affect all firms giving investment advice, those of you that only advise on mortgage and insurance business will still be governed by the MIPRU rules that are not changing.

If you have subordinated loans then refer to your ATEB consultant for clarification how these are treated.

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

It is important that you understand the requirements and plan accordingly. Remember – the capital adequacy requirements apply at all times, not just when you report to the FCA.

Action Required By You

  1. If you are unsure of any of the requirements, please seek guidance. ATEB clients should discuss with their ATEB consultant.
  2. Your accountant should also be fully conversant with the requirements.

About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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