23
SEP
2016

FCA ICAAP reviews and subsequent Individual Capital Guidance

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The FCA have, today, issued a Dear CEO letter to IFPRU firms alerting them to the fact that their ICAAP may be requested for detailed inspection.

For some firms this will not be news as the process has already commenced, ICAAPs have been subjected to FCA review and the Supervisory Review and Evaluation Process (SREP) has issued Individual Capital Guidance (ICG).

This would usually take the form of a Pillar 2 capital adequacy requirement as a percentage, say 200%, of the Pillar 1 requirement. This makes the firm retain more capital than they may otherwise have wished. By making firms hold more funding the FCA view this as a way of mitigating, at least partly, the risk and weaknesses identified.

IFPRU firms should review their ICAAPs to ensure that they meet the exact requirements in IFPRU 2.2 and that they are ready to remit to the FCA their ICAAP immediately upon their request.

About the Author
Blogs are generated by the staff of Pragmatic Compliance Solutions who have had regulatory experience of over thirty years each. Compliance started with the AFBD back in 1987 and both the compliance experts that run Pragmatic Compliance Solutions were well into their careers by then. They have watched compliance develop from a time when insider dealing was acceptable, to the current state of virtually total control. A whole new industry has evolved in this period of change to safeguard the clients and the financial system. Pragmatic Compliance Solutions has become aware that the regulations are now so complex, it is difficult to find one service provider with all the answers, let along cost effective answers. Hence the company was born.

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