This chapter applies to an operator of an electronic system in relation to lending.
This chapter amplifies the threshold condition 2D (Appropriate resources) by providing that a firm must meet, on a continuing basis, a basic solvency requirement. This chapter also builds on Principle 4 which requires a firm to maintain adequate financial resources by setting out appropriate requirements for a firm according to what type of firm it is.
More generally, having adequate financial resources gives the firm a degree of resilience and some indication to consumers of creditworthiness, substance and the commitment of its owners. The rules in this chapter aim to ensure that a firm has financial resources which can provide cover for operational and compliance failures and pay redress, as well as reducing the possibility of a shortfall in funds and providing a cushion against disruption if the firm ceases to trade.