PwC responds to IFPR consultation

David Croker, PwC Partner, comments on today's FCA Investment Firm Prudential Regime (IFPR) consultation:

"The second and perhaps most significant IFPR consultation has landed today. We now have a crucial part of the jigsaw of what is fundamentally a new prudential regime for all asset and wealth management firms. Despite the importance of the consultation, firms only have a little over five weeks to respond.

"A large part of today's rules focus on the new ICARA process. For anyone familiar with the ICAAP this should and will feel very different; for others it will be entirely new. As the FCA states, the ICARA process should be 'the centrepiece of firms’ risk management processes', and the means through which the FCA monitors firms. Organisations should also note the FCA's focus on governance and Senior Manager accountability.

"Firms must now also finalise their modeling of the new capital requirements, with the details on the remaining K-factors now clear. Most firms have undertaken analysis based on the previous consultation, so this should allow them to rapidly conclude this part of their implementation work, and focus on the additional elements from today's consultation.

"With the final implementation date only eight months away - and just over two months for firms with EU entities - this is a big ask. Those firms that got ahead of the curve will be best placed to successfully tackle this, but there is still much work to do."