Thresholds, Indicators
and OFAR Monitoring
Helping firms prepare a robust ‘Regulatory Monitoring Tool’.
We help meet the Overall Financial Adequacy Rule (OFAR) by embedding capital and liquidity monitoring into monthly management processes. This includes calculating thresholds, maintaining the FCA’s early warning buffer, building tailored financial projections and wind-down cost models, and integrating ICARA and wind-down planning. With over 25 years of experience supporting firms with their regulatory requirements, our team of experts are well suited to provide tailored support to your business.
Turning regulatory requirements into practical, ongoing processes.
Within the OFAR, you are required to hold sufficient capital and liquid assets to cover the following:
Own funds threshold requirement
Liquid assets threshold requirement
When calculating the thresholds, your firm must consider the risks it incurs from ongoing operations and the assessment from wind down. A successful method is to integrate the OFAR monitoring into your monthly management process, e.g. including capital and liquidity adequacy calculation in the management accounts.
Further, the rules introduce a new 'early warning indicator' concept, defined as an amount of funds equal to:
110% of a firm's own funds threshold requirement, or
such other amount as the FCA may specify in a requirement imposed on a firm.
Accordingly, at any point in time you will need to maintain 10% of own funds threshold requirement as a buffer and if your own funds fall below the indicator, then you will be required to notify to the FCA about it along with the remedial actions that the firm will be expected to take immediately.
Our services
Ensuring the OFAR is embedded in your compliance management, we help you set key thresholds and keep the FCA’s early warning buffer in check. Our team can customise your management accounts, financial forecasts and wind-down cost models, and link your ICARA and wind-down plan into your OFAR process, so you meet your full requirements under the rule.
We build tailored financial projections within appropriate regulatory monitoring tools to help you identify potential capital or liquidity shortfalls early, helping you keep ahead and supporting your strategic planning. We also review wind-down costs, ensuring they reflect any changes to staffing, leases, or supplier contracts that could impact your fixed cost base.
Why work with us?
Regulatory reporting can be complex. Appointing us as your dedicated partner can reduce the burden and help you focus more time back into your business.
Ahead of the curve
The regulatory landscape is constantly evolving. Our team stay informed of regulatory updates, ensuring that your reports will meet the latest regulatory standards.
Jurisdictional reporting
Our experienced team know the regulatory environment inside and out. We can accommodate your UK, US, and EU reporting requirements as required.
Relationship-led approach
We get to know your business and understand your team, helping us to work through and process your data appropriately for the reporting requirements.
There when you need us
You'll benefit from a dedicated support team that are focused on your priorities. Whether submitting once, or multiple times a year, our experts will work to your deadlines, acting in a responsive and efficient manner.