UK Regulator Issues Consultation Paper on Adequate Financial Resources

The U.K. Financial Conduct Authority has published a consultation paper explaining the FCA's proposed approach to minimum financial resources requirements and seeking feedback on the proposed clarifications to its stated approach. The consultation paper is relevant for all FCA solo-regulated firms subject to the FCAs's threshold conditions and/or Principles for Business. Firms should submit responses by September 13, 2019.

The FCA sets out prudential standards for certain regulated firms in its Handbook, including requirements regarding the financial resources such firms should hold to minimize market disruption and protect consumers in the event such firms run into financial difficulty. The consultation paper seeks to provide greater clarity to the market on certain aspects of the financial resources requirements, including:
 

• the purpose of holding adequate financial resources and the FCA's approach around monitoring these resources;
• the FCA's expectations around firms' approach to financial resources; and
• the practices firms can adopt when assessing whether they hold adequate financial resources.

The consultation paper asks respondents to confirm whether they agree with the FCA’s explanations and, if not, to explain why.

View the FCA's consultation paper.

Return to main website.