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News – 11.07.25
Buzzacott has been ranked 30th in the Sunday Times Top 100 Apprenticeship Employers 2025!
Buzzacott has been ranked 30th in the Sunday Times Top 100 Apprenticeship Employers 2025 … Read more
Insight – 09.07.25
The importance of ISAE 3402 reports in risk management
Undertake a ISAE 3402 report to help mitigate risk and improve stakeholder trust. … Read more
Upcoming event – 22.07.25
'Aligning purpose with performance' - a joint webinar by Buzzacott and Rathbones
'Aligning purpose with performance' - a joint webinar by Buzzacott and Rathbones … Read more
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enquiries@buzzacott.co.uk T +44 (0)20 7556 1200
Currently, the capital requirements for investment firms under the MIFIDPRU regime draw heavily from the UK Capital Requirements Regulation (UK CRR) — a framework that was originally designed for banks. These rules, while robust, are often overly complex and misaligned with the simpler capital structures of investment firms.
The FCA’s proposal seeks to consolidate and clarify the definition of regulatory capital — also known as “own funds” — within the MIFIDPRU handbook. This streamlining will save firms significant time in tracing references across various regulations and the proposals are set to reduce the volume of legal text by 70%.
Refined legal text: The proposed changes would significantly reduce the complexity of the capital rules, making them easier to interpret and apply.
No changes to current capital structures: The three existing tiers of regulatory capital — Common Equity Tier 1 (CET1), Additional Tier 1 (AT1), and Tier 2 — will remain in place. The types of instruments that qualify as regulatory own funds and the deductions required will also remain largely unchanged.
The FCA has made it clear that the proposed changes are not intended to require firms to alter their existing capital arrangements. Instead, the reforms are designed to reduce compliance burdens and improve regulatory clarity which will be particularly beneficial for smaller firms and new entrants.
The consultation phase closed on 12 June 2025. The FCA plans to publish a policy statement in the second half of the year, with the new framework expected to come into force on 1 January 2026.
The consultation forms part of the FCA’s broader strategy to modernise the UK’s prudential regime for investment firms, ensuring it remains proportionate, effective, and fit for purpose.
If you have any questions about the consultation paper or would like more information on our support options for FCA regulated firms, don’t hesitate to contact us. Fill in the form below to speak to one of our experts.
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