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MIFIDPRU 7 Annex 7 Map of rules and guidance relating to the ICARA process

MIFIDPRU 7 Annex 7RG

17.1

G

(1)

The table in this annex identifies the rules in MIFIDPRU 7 that impose obligations relating to the ICARA process and the guidance provisions corresponding to those rules.

(2)

MIFIDPRU investment firms may find this annex helpful when designing and reviewing their ICARA processes to ensure that all mandatory requirements have been met.

(3)

Firms should not use this table as a substitute for reading and applying the detailed rules and guidance in MIFIDPRU 7.

MIFIDPRU rule

Basic obligation

Associated guidance

Content of guidance

MIFIDPRU 7.4: baseline ICARA obligations

MIFIDPRU 7.4.7R

The overall financial adequacy rule

MIFIDPRU 7.4.8G

Explanation of the link between the overall financial adequacy rule and the ICARA process

MIFIDPRU 7.4.9R

The requirement to operate an ICARA process to identify, monitor and, if proportionate, reduce all material potential harms relevant to the firm

MIFIDPRU 7.4.16G

Guidance on how firms should seek to mitigate the risk of potential harms

MIFIDPRU 7.4.10R

The requirement for the ICARA process to be proportionate to the nature, scale and complexity of the firm’s business

MIFIDPRU 7.4.11R

The requirement for the ICARA process to be internally consistent

MIFIDPRU 7.4.12G

Explanation of the FCA’s expectations in relation to consistency and coherency of the ICARA process

MIFIDPRU 7.4.13R

The requirement to identify all material harms that may result from the firm’s business

MIFIDPRU 7.4.14G

Explanation of the basic factors that will be relevant when identifying potential harms

MIFIDPRU 7.4.15G

Cross-reference to additional guidance in MIFIDPRU 7 Annex 1R and MIFIDPRU 7 Annex 2R

MIFIDPRU 7 Annex 1G

Guidance on assessing potential harms that is potentially relevant to all firms

MIFIDPRU 7 Annex 2G

Additional guidance on assessing potential harms that is relevant for a firm that is dealing on own account or that has significant investments on its balance sheet

MIFIDPRU 7.5: Capital and liquidity planning, stress testing, wind-down planning and recovery planning

MIFIDPRU 7.5.2R

Business model assessment and capital and liquidity planning requirements, including stress testing

MIFIDPRU 7.5.3G

Guidance referring to Finalised Guidance FG20/1

MIFIDPRU 7.5.4G

Guidance on stress testing obligations and reverse stress testing for firms with more complex businesses or operating models

MIFIDPRU 7 Annex 1.15G to 7 Annex 1.20G

Additional guidance on more in-depth stress testing and reverse stress testing

MIFIDPRU 7.5.5R

Recovery planning requirements

MIFIDPRU 7.5.6G

Guidance on issues that may be relevant when assessing potential recovery actions

MIFIDPRU 7.5.7R

Wind-down planning requirements

MIFIDPRU 7.5.8G

Guidance referring to the Wind-Down Planning Guide and Finalised Guidance FG20/1

MIFIDPRU 7.5.9R

Requirement to use wind-down analysis to assess levels of own funds and liquid assets required under overall financial adequacy rule

MIFIDPRU 7.5.10G

Explanation of the interaction between the overall financial adequacy rule and the wind-down triggers

MIFIDPRU 7.6: Assessing and monitoring the adequacy of own funds

MIFIDPRU 7.6.2R

Requirement to produce a reasonable estimate of impact of potential harms on own funds

MIFIDPRU 7.6.4G

Guidance on how the assessment of potential harms interacts with the own funds threshold requirement and the overall financial adequacy rule and how the firm should conduct its assessment

MIFIDPRU 7.6.3R

Requirement to use assessment under MIFIDPRU 7.6.2R to assess if additional own funds required to meet overall financial adequacy rule

MIFIDPRU 7.6.6G

Guidance explaining the circumstances in which the guidance in MIFIDPRU 7.6.7G to MIFIDPRU 7.6.10G is relevant

MIFIDPRU 7.6.7G

Guidance on how a non-SNI MIFIDPRU investment firm should assess whether harms may be covered by its own funds requirement

MIFIDPRU 7.6.8G

Guidance on circumstances in which harms may not be covered by a non-SNI MIFIDPRU investment firm’s own funds requirement

MIFIDPRU 7.6.9G

Guidance on how an SNI MIFIDPRU investment should assess whether harms may be covered by its own funds requirement

MIFIDPRU 7.6.10G

Guidance on how a firm’s assessment of potential harms contributes to determining its own funds threshold requirement

MIFIDPRU 7.6.5R

Requirement to meet own funds threshold requirement with specified types of own funds

MIFIDPRU 7.6.11R

Notification requirements when a firm’s own funds reach certain levels

MIFIDPRU 7.6.12G

Guidance on the FCA’s ability to set an alternative early warning indicator

MIFIDPRU 7.6.13G

Guidance explaining how notifications under MIFIDPRU 7.6.11R interact with general notification obligations under Principle 11 or SUP 15.3

MIFIDPRU 7.6.14G and MIFIDPRU 7.6.15G

Explanation of FCA’s approach to intervention when firm’s own funds reach certain levels

MIFIDPRU 7.7: Assessing and monitoring the adequacy of liquid assets

MIFIDPRU 7.7.2R

Requirement to produce reasonable estimate of liquid assets required by the firm

MIFIDPRU 7.7.3G

Guidance on the interaction between the overall financial adequacy rule and the liquid assets that a firm must hold

MIFIDPRU 7.7.4G

Guidance on how a firm should assess the liquid assets required for the ongoing operation of its business

MIFIDPRU 7.7.5G

Guidance on the basic liquid assets requirement and how to determine the firm’s liquid assets threshold requirement

MIFIDPRU 7.7.6R

Requirement to meet liquid assets threshold requirement with core liquid assets and non-core liquid assets

MIFIDPRU 7.7.7G

General principles applicable to non-core liquid assets

MIFIDPRU 7.7.8R

Basic definition of non-core liquid assets

MIFIDPRU 7.7.9G

Guidance on exclusions for non-core liquid assets

MIFIDPRU 7.7.10R

Requirement to apply appropriate haircut to non-core liquid assets

MIFIDPRU 7.7.11G and 7.7.12G

Guidance on minimum haircuts for non-core liquid assets

MIFIDPRU 7.7.13G

Guidance on approach to applying haircuts to shares or units in collective investment undertakings

MIFIDPRU 7.7.14R

Notification requirements when a firm’s liquid assets reach certain levels

MIFIDPRU 7.7.15G

Guidance explaining how notifications under MIFIDPRU 7.6.14R interact with general notification obligations under Principle 11 or SUP 15.3

MIFIDPRU 7.7.16G and 7.7.17G

Explanation of FCA’s approach to intervention when firm’s liquid assets reach certain levels

MIFIDPRU 7.8: Reviewing and documenting the ICARA process

MIFIDPRU 7.8.2R

Requirement to review the ICARA process at least annually

MIFIDPRU 7.8.3G

Guidance on reviewing the ICARA process following a material change in the firm’s business

MIFIDPRU 7.8.4R

Requirement for firm to notify the FCA of the submission date of the firm’s MIF007 (ICARA assessment questionnaire) return

MIFIDPRU 7.8.5G

Guidance on interaction between the firm’s ICARA review and its submission date for its MIF007 return

MIFIDPRU 7.8.6R

Requirement to submit MIF007 return following review of ICARA process due to a material change in the firm’s business

MIFIDPRU 7.8.7R

Requirement to document review of the ICARA process and minimum contents of review document

MIFIDPRU 7.8.8R

Requirement for firm’s governing body to review and approve the ICARA document

MIFIDPRU 7.8.9G

Guidance on the interaction between the obligations in COCON and the ICARA process

MIFIDPRU 7.8.10R

Record keeping requirements in relation to the ICARA process

MIFIDPRU 7.9: Firms forming part of a group

MIFIDPRU 7.9.2R

Requirement for any firm that forms part of a group to assess risks arising from that group or its other members

MIFIDPRU 7.9.3G

Guidance on the entities included within a firm’s assessment of group risk

MIFIDPRU 7.9.5R

Ability of investment firm group to operate the ICARA process on a group-level basis

MIFIDPRU 7.9.4G

Guidance that an investment firm group is not required to operate an ICARA process on a consolidated basis

MIFIDPRU 7.9.6R

Disapplication of individual ICARA process requirement in relation to MIFIDPRU investment firm included in a group ICARA process

MIFIDPRU 7.9.7R

Circumstances in which a group ICARA process cannot be used

MIFIDPRU 7.9.9G

Guidance on when the FCA may prohibit the use of a group-level ICARA process in relation to one or more firms

MIFIDPRU 7.9.8R

Application of requirements in MIFIDPRU 7.4 to MIFIDPRU 7.8 to an investment firm group operating a group ICARA process

MIFIDPRU 7.9.10R

Ability to include multiple firms within one ICARA document

MIFIDPRU 7.9.11G

Guidance on when a single ICARA document can be used