IFPR reporting mandate: What it is
The UK Investment Firm Prudential Regime (IFPR) is a reporting obligation applying to all UK MiFID II Investment Firms. It is set to come into force from the 1st of January 2022. While the final contours of the IFPR regulation are still being finalized — with the Financial Conduct Authority (FCA) just having published its third consultation on the matter — it is evident that investment firms’ reporting obligations will differ based on their prudential category.
Why is the IFPR reporting mandate being introduced?
Simplifying and streamlining the prudential requirements of MiFID investment firms that are regulated in the UK by the FCA is the main goal of this regime. It wants to refocus expectations and prudential requirements away from the risks firms face, towards the potential harm they can pose to the markets and consumers.
Who will be affected by the IFPR?
The IFPR is applicable to:
- Collective Portfolio Management Investment Firms (CPMIs)
- MiFID investment firms authorized and regulated by the FCA, and
- Regulated and unregulated holding companies that contain either of the above
It will not apply to investment firms designated by the Prudential Regulation Authority (PRA). They will continue to remain under the prudential supervision of the PRA.
What does this mean for affected entities?
The IFPR is analogous to the Investment Firms Regulation (IFR) and Investment Firms Directive (IFD) prudential regime that is applicable to EU MiFID firms from the 26th of June 2021. As its enforcement date is set after the EU Exit transition period, UK MiFID firms will comply with the UK-specific prudential regime, IFPR.
What does the future hold?
To develop the IFPR, the FCA is expected to assess responses from the European Banking Authority’s (EBA) Implementing Technical Standards and the industry to its consultation paper, among others.
While MiFID firms in the UK have less than a year to get ready, they can start by recognizing the potential impacts this new regime is going to have on their business. This process can be eased to a great extent as there is already a lot of documentation available on the IFD/IFR.
How can firms prepare for this regime?
With a targeted implementation date of 1st Jan 2022, FCA-regulated investment firms can follow a few simple steps to get ready for this regime:
- Determining prudential category
- Identifying relevant requirements based on the above classification
- Performing an impact assessment
- Designing and implementing an action plan
How we can help you
Under the IFD/IFR regime, investment firms in the EU are required to submit reports in the XBRL format. The UK FCA may bring in the XBRL requirement too.
With our extensive experience providing XBRL solutions in the UK — for HMRC, and FCA-ESEF reporting requirements — we can assist you with IFPR reporting. If you are a qualifying firm under MiFID II, our SaaS solution can —
- Integrate with an automated reporting framework
- Facilitate auto data extraction and XBRL instance generation
- Provide modularity to incorporate future changes in business rules or taxonomies