Capital
Firms must hold sufficient regulatory capital based on formulaic requirements, with the amounts varying according to firm type such as; SNI and Non-SNI MIFIDPRU Investment Firms, Collective Portfolio Management (CPM) firms, E-Money Institutions (EMIs) and Payments firms.
The complexity of these calculations continues to increase with the Regulator’s focus on financial resilience, with further emphasis on the quality of capital held. Firms must monitor their available capital resources (both in terms of quantity and quality) and assess the capital impact of changes to their business model including; changes in a firm’s activities; group structures; acquisitions or disposals; and changes in regulatory permissions to ensure that the resources held are reflective of the size, scale and complexity of the business.
It is important to get the calculations right to ensure that your firm is adequately capitalised at all times. Failure to meet your financial resource requirements could be evidence of poor governance within your organisation and may result in regulators requiring you to hold additional financial resources above your basic requirements.
Liquidity
Maintaining adequate liquidity has become essential for firms to demonstrate their financial resilience.
Many firms are now subject to minimum liquidity requirements and all firms now have to carry out their own internal assessment of the amount of liquidity they should hold, to support their ongoing business activities and mitigate harm in the event the firm enters a wind-down. Further, it is not only essential to determine the Firm’s liquidity need, but also ensure that the Firm holds liquid assets of sufficient quality to meet these potential needs.
The regulator may choose to review a firm’s assessment and can impose their own additional liquid assets add-on. As a result of the pandemic and the current economic climate, regulators have started to pay a lot more attention to liquidity and a firm’s ability to pay bills as they fall due. Firms may have to report on on their liquidity position periodically, or on an ad-hoc basis upon request from the regulator.
How we can support you
Our team includes highly experienced accountants and compliance consultants, from the industry and the Regulator. They handle reporting for a large number of clients and have worked on s166 skilled persons reviews relating to capital and liquidity requirements.
We provide the assurance that your firm is complying with capital and liquidity requirements. Our team has experience helping all different firm types, including banks, IFRU, BIPRU and Electronic Money Institutions which allows us to ensure our clients avoid common issues.
regulatory reporting guide
advisory services guide
A break down of our core service offerings are detailed as below:
Capital requirements: ongoing support
We will:
- Review the eligibility of capital (own funds) and the Firm’s requirements and underlying calculations at any stage, whether it is at initial authorisation, variation of permission or an ongoing requirement;
- Assist with capital planning (e.g. ahead of an acquisition or major change to business strategy);
- Provide a remediation service to manage any breaches or issues; and
- Prepare financial forecasts as part of a firm’s ongoing assessment or application when required.
Liquidity: ongoing support
We will:
- Review a firm's assessment of their liquidity requirements or manage the assessment for them, as part of either initial authorisation, variation of permissions or an ongoing requirement;
- Assist with any remediation that is identified; and
- Prepare financial forecasts as part of a firm’s ongoing assessment or application when required.
Prudential monitoring review
We will:
- Review the impact of the relevant prudential requirements on the business;
- Produce indicative regulatory capital and liquid asset calculations;
- Provide detailed workings, setting out our calculations, relevant rules and associated methodology;
- Provide advice in respect of remedial action (if required);
- Assist with implementing prudential monitoring either internally or with ongoing support to ensure the Firm is compliant with its regulatory capital and liquidity requirements; and
- Prepare or review financial forecasts and embed the Firm’s regulatory capital and liquidity requirements.
CONTACT US TO LEARN MORE ABOUT OUR OFFERINGS
Why choose Cosegic?
Our 360 degree perspective of regulatory affairs
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Our 360 degree perspective of regulatory affairs
Our wide range of financial sector experts come together on a regular basis to discuss their interactions with the FCA and the regulatory trends that they are seeing, providing us with a more informed understanding of the FCA than our competitors.
Direct, proportionate advice
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Direct, proportionate advice
Our unique perspective means we really do have our fingers on the pulse of regulation, which helps us to ensure that the advice we offer is practical, helpful and directly proportionate to our clients’ needs.
Our understanding of the role of compliance in firms
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Our understanding of the role of compliance in firms
We have watched the evolution of compliance over the past twenty years and understand that compliance must now become a core part of how financial services carry out their businesses in order for them to be successful.
Compliance confidence for visionary growth
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Compliance confidence for visionary growth
In recognising this, our services have been built in a way that can help you navigate regulation ensuring you will keep your vision and objectives intact. Our breadth of experience allows us to balance your business objectives with your compliance requirements.
