Until the Integrated Prudential sourcebook is introduced, the detailed financial resources standards that we apply to investment firms are set out in the Interim Prudential sourcebook for investment businesses (IPRU (INV)). The rules and guidance in this sourcebook help us meet our statutory objectives of protecting consumers and maintaining market confidence. By setting minimum capital standards, this sourcebook seeks to reduce the risk that investment firms will be unable to meet their liabilities and commitments to consumers and counterparties.
This section of the Overview only discusses those parts that relate to a low resource firm i.e. a firm that is:
Your firm must take reasonable steps to ensure that it keeps records that are sufficient to show at any time that it has complied with the requirements of IPRU (INV) Chapter 13. It must also set up procedures and controls to ensure that those records are made promptly and accurately and, where appropriate brought up-to-date at regular and frequent intervals (IPRU (INV) 13.1.10 R).
The Supervision manual sets out provisions on the periodic reporting and notification of financial information to us. Small personal investment firms (most of which will be low resource firms) must comply with SUP 16.7.48 to SUP 16.7.53 . There is further information in Chapter 12 of this Overview.
Your firm must tell us as soon as it finds out that its professional indemnity insurance is being cancelled or that it cannot obtain new cover (IPRU (INV) 13.1.9 R). This rule is in addition to the notification requirements in the Supervision manual SUP 15 SUP 15).