MFA, AIMA, ACC Submit Comment Letter Encouraging Proportionate Approach to IFPR Rules

Managed Funds Association (MFA) submitted a response jointly with Alternative Investment Management Association (AIMA) and Alternative Credit Council (ACC) to the UK Financial Conduct Authority’s consultation paper on the new UK Investment Firm Prudential Regime. MFA and the associations generally encouraged the FCA’s proportionate approach to rules on capital and remuneration and recommended the avoidance of rules in some areas that would be more stringent than those applied by the European Union. In the letter, MFA and the associations make the following additional specific recommendations:

  • Capital. FCA should introduce a one-year transitional grace period for investment firms in order to allow them to determine their additional own funds, liquid assets requirements, and specific recovery and wind-down planning. This is important because all UK MiFID investment firms will be subject to the basic liquid assets requirement.
  • Remuneration. Amend the provisions regarding the identification of material risk-takers, so as to exclude, for example, staff whose role has low or no impact on the firm’s risk profile or on the assets it manages.