Content Options

IFPRU 11.2 Individual recovery plans

Application

IFPRU 11.2.1 R

This section applies to an IFPRU 730k firm that is not subject to supervision on a consolidated basis.

IFPRU 11.2.2 G
IFPRU 11.2.3 G

IFPRU 1.2 (Significant IFPRU firm) explains the definition of a significant IFPRU firm.

Requirement to draw up and maintain a recovery plan

IFPRU 11.2.4 R

A firm must draw up and maintain a recovery plan.

[Note: article 5(1) of RRD]

IFPRU 11.2.5 G

A recovery plan is a governance arrangement for the purposes of SYSC 4.1.1 R (General requirements).

Recovery plan for a significant IFPRU firm

IFPRU 11.2.6 R

If a firm is a significant IFPRU firm, its recovery plan must include the information in IFPRU 11 Annex 1R (Contents of recovery plans for significant IFPRU firms and group recovery plans for groups that include significant IFPRU firms).

[Note: article 5(5) of RRD]

Recovery plan for a non-significant IFPRU firm

IFPRU 11.2.7 R

If a firm is not a significant IFPRU firm its recovery plan must include:

  1. (1)

    a summary of the key elements of the recovery plan;

  2. (2)

    information on the governance of the firm, including:

    1. (a)

      how the recovery plan is integrated into the corporate governance of the firm; and

    2. (b)

      the firm's overall risk management framework;

  3. (3)

    a description of the legal and financial structures of the firm, including:

    1. (a)

      the core business lines; and

    2. (b)

      critical functions;

  4. (4)

    recovery options, including:

    1. (a)

      capital and liquidity actions required to maintain or restore the viability and financial position of the firm; and

    2. (b)

      arrangements and measures to conserve or restore the firm'sown funds;

  5. (5)

    an assessment of the expected timeframe for implementing recovery options;

  6. (6)

    a summary of the overall recovery capacity of the firm, including:

    1. (a)

      the risks associated with recovery options;

    2. (b)

      an analysis of any material impediments to the effective and timely execution of the recovery plan; and

    3. (c)

      whether and how material impediments could be overcome;

  7. (7)

    a summary of any material changes to the recovery plan since the previous version was sent to the FCA;

  8. (8)

    preparatory measures the firm has taken or plans to take to help implement the recovery plan; and

  9. (9)

    the measures which the firm could take if it has infringed an RRD early intervention condition or is likely to infringe one of those conditions in the near future.

[Note: articles (4)(1), 5(5) and Annex A of RRD]

IFPRU 11.2.8 G

A firm should include additional information from IFPRU 11 Annex 1R (Recovery plans for significant IFPRU firms and group recovery plans for groups that include significant IFPRU firms) in its recovery plan where this information is material to its business.

[Note: article 5(5) of RRD]

IFPRU 11.2.8A G

1The FCA may require a firm to include the additional information referred to in IFPRU 11.2.8G in its recovery plan using its power under section 55L of the Act.

[Note: article 4(3) of RRD]

Recovery options

IFPRU 11.2.9 G
  1. (1)

    When identifying recovery options, a firm should consider a range of scenarios of severe macroeconomic and financial stress relevant to the firm's specific conditions.

  2. (2)

    The range of scenarios should include system-wide events and stress specific to individual legal persons and groups.

[Note: article 5(6) of RRD]

Extraordinary public financial support

IFPRU 11.2.10 R

A firm must not assume any access to, or receipt of, extraordinary public financial support in its recovery plan.

[Note: article 5(3) of RRD]

Use of central bank facilities

IFPRU 11.2.11 R

If the recovery plan includes the use of central bank facilities, the firm must:

  1. (1)

    include an analysis of how and when the firm may apply for the use of central bank facilities; and

  2. (2)

    identify those assets which would be expected to qualify as collateral.

[Note: article 5(4) of RRD]

Recovery plan indicators

IFPRU 11.2.12 R

A firm must:

  1. (1)

    include a framework of indicators in its recovery plan which identify when it may take appropriate actions in the plan;

  2. (2)

    ensure the recovery plan indicators can be monitored easily; and

  3. (3)

    have arrangements to monitor the recovery plan indicators regularly.

IFPRU 11.2.13 G

The recovery plan indicators may relate to the firm's financial position and may be of a qualitative or a quantitative nature.

IFPRU 11.2.14 R

1A firm must notify the FCA without delay of a decision to take an action referred to in its recovery plan, whether or not the relevant indicator has been met.

IFPRU 11.2.15 R

A firm must notify the FCA without delay of a decision not 1 to take an action referred to in its recovery plan1where the relevant indicator has been met.1

[Note: article 9(1) of RRD]

Assessment and review by the management body

IFPRU 11.2.16 R

A firm must ensure its management body assesses and approves the recovery plan before sending it to the FCA.

[Note: article 5(9) of RRD]

IFPRU 11.2.17 R

A firm must demonstrate to the FCA that:

  1. (1)

    carrying out its recovery plan is reasonably likely to maintain or restore the viability and financial position of the firm, taking into account the preparatory measures that the firm has taken, or plans to take; and

  2. (2)

    its recovery plan:

    1. (a)

      is reasonably likely to be carried out quickly and effectively in situations of financial stress; and

    2. (b)

      avoids, to the maximum extent possible, any significant adverse effect on the financial system, including in scenarios which would lead other RRD institutions to implement recovery plans and group recovery plans at the same time.

[Note: article 6(1) of RRD]

Updating and submission of recovery plans

IFPRU 11.2.18 R
  1. (1)

    A significant IFPRU firm must update its recovery plan at least annually.

  2. (2)

    A firm that is not a significant IFPRU firm must update its recovery plan at least once every two years.

  3. (3)

    A firm must also update its recovery plan after a change to any of the following which could materially affect its recovery plan:

    1. (a)

      its legal or organisational structure;

    2. (b)

      its business; or

    3. (c)

      its financial situation.

[Note: articles 4(1)(b) and 5(2) RRD]

IFPRU 11.2.19 R

A firm must send its recovery plan to the FCA in line with SUP 16.20 (Recovery plans and information for resolution plans).

[Note: article 6(1) of RRD]