Related provisions for IFPRU 2.3.9
1 - 5 of 5 items.
(1) IFPRU 2.3 sets out guidance on IFPRU 2.2 (Adequacy of financial resources) so far as it applies to an IFPRU investment firm. In particular, guidance on how a firm should carry out its ICAAP, as well as some factors the FCA will take into consideration when undertaking a SREP. The terms ICAAP and SREP are explained in IFPRU 2.3.3 G. IFPRU 2.3.48 G to IFPRU 2.3.52 R are rules that apply to a firm with an IRB permission.(2) IFPRU 2.3 is mainly written on the basis that IFPRU
The adequacy of a firm's capital needs to be assessed both by a firm and the FCA. This process involves:(1) an internal capital adequacy assessment process (ICAAP), which a firm is obliged to carry out in accordance with the ICAAPrules; and(2) a supervisory review and evaluation process (SREP), which is conducted by the FCA.
The FCA will review a firm'sICAAP, including the results of the firm's stress tests carried out under IFPRU and the EUCRR, as part of its SREP. Provided that the FCA is satisfied with the appropriateness of a firm's capital assessment, the FCA will take into account that firm'sICAAP and stress tests in its SREP. More material on stress tests for a firm with an IRB permission can be found in IFPRU 2.3.50 R to IFPRU 2.3.54 G.11
IFPRU 2.3.34 G to IFPRU 2.3.36G set out what the FCA considers to be a proportional approach to preparing an ICAAP as referred to in IFPRU 2.2.12 R (The processes, strategies and systems required by the overall Pillar 2 rule should be comprehensive and proportionate), according to the relative degree of complexity of a firm's activities. If a firm adopts the appropriate approach, it may enable the FCA more easily to review a firm'sICAAP when the FCA undertakes its SREP. The FCA
(1) In identifying an appropriate range of adverse circumstances and events in accordance with IFPRU 2.2.37 R (2):(a) a firm will need to consider the cycles it is most exposed to and whether these are general economic cycles or specific to particular markets, sectors or industries;(b) for the purposes of IFPRU 2.2.37 R (2)(a), the amplitude and duration of the relevant cycle should include a severe downturn scenario based on forward-looking hypothetical events, calibrated against