This chapter applies to:
a collective portfolio management firm; and
a collective portfolio management investment firm.
A collective portfolio management firm that manages an AIF is an internally managed AIF or an external AIFM. If the firm is a full-scope UK AIFM this affects the firm's base own funds requirement3 (see IPRU-INV 11.3.1R). An internally managed AIF that is a full-scope UK AIFM is not permitted to engage in activities other than the management of that AIF, whereas an external AIFM that is a full-scope UK AIFM may manage AIFs and/or UCITS, provided it has permission to do so. A full-scope UK AIFM that is an external AIFM and/or a UCITS management company may undertake any of the additional investment activities permitted by article 6(4) of AIFMD or article 6(3) of the UCITS Directive (as applicable), provided it has permission to do so, but if so it is classified as a collective portfolio management investment firm, as opposed to a collective portfolio management firm.
A collective portfolio management investment firm is a MIFIDPRU investment firm, and so is subject to the requirements of MIFIDPRU in addition to the requirements of IPRU-INV 11, as explained in IPRU-INV 11.6.3G3.
A small authorised UK AIFM that is not also a UCITS management company is not a collective portfolio management firm or a collective portfolio management investment firm and is therefore not subject to IPRU-INV 11. This type of firm is subject to IPRU-INV 5 if it is an investment management firm or MIFIDPRU if it is a MIFIDPRU investment firm3.
Except where a rule makes a different provision, terms in this chapter must have the meaning given to them in the Companies Act 2006 or the firm's accounting framework (usually UK generally accepted accounting principles or IFRS) where defined in that Act or framework.
This chapter amplifies threshold condition 2D (Appropriate resources) by providing that a firm must meet, on a continuing basis, a minimum capital resources requirement. This chapter also amplifies Principles 3 and 4 which require a firm to take reasonable care to organise and control its affairs responsibly and effectively with adequate risk management systems, and to maintain adequate financial resources by setting out a capital resources requirement for a firm according to the regulated activity or activities it carries on.