HM Treasury has published the outcome of its consultation on the UK’s approach to the implementation of the Investment Firms Prudential Regime (IFPR). The consultation outlined how the government proposed to exercise powers under the Financial Services Act 2021 to ensure effective implementation of IFPR.
As a result of the responses to the consultation, the government is changing its approach in some areas. It has also confirmed it will remove the equivalence provision contained in Article 132 of the UK CRR and will remove FCA-regulated EUR 730,000 ICR firms from the scope of the UK resolution regime. The government also says the Investment Bank Special Administration Regime will be available to use to manage the failure of those investment firms that meet the definition of ‘investment bank’ in section 232 Banking Act 2009.
The changes to the scope of the resolution regime will require changes to the legislation underpinning the UK resolution regime. The government intends to deliver this via secondary legislation later in 2021. This should provide firms with adequate time to prepare ahead of the 1 January 2022 IFPR implementation date.