Related provisions for IFPRU 3.1.8

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This section implements EC standards for the base own funds requirement to be held by an IFPRU investment firm. In particular, it implements articles 28 and 29 of CRD.
(1) Subject to (2), an IFPRU investment firm must maintain, at all times, common equity tier 1 capital equal to, or in excess of, the base own funds requirement. (2) For the purpose of (1), the common equity tier 1 capital of an IFPRU investment firm must comprise only of one or more of the items referred to in article 26(1)(a) to (e) of the EU CRR (Common equity tier 1 items).[Note: article 28(1) of CRD]
At the time that it first becomes an IFPRU investment firm, a firm must hold initial capital of not less than the base own funds requirement applicable to that firm.
IFPRU investment firms are divided into the following classes for the calculation of the base own funds requirement and any other provision of the Handbook that applies this classification:(1) an IFPRU 50K firm;(2) an IFPRU 125K firm;(3) an IFPRU 730K firm; and(4) a collective portfolio management investment firm.
(1) This rule defines some of the terms used in the overall Pillar 2 rule. (2) Residual risk means the risk that credit risk mitigation techniques used by the firm prove less effective than expected.(3) Securitisation risk includes the risk that the own funds held by a firm for assets which it has securitised are inadequate having regard to the economic substance of the transaction, including the degree of risk transfer achieved.(4) Business risk means any risk to a firm arising
(1) When a collective portfolio management investment firm that is an IFPRU investment firm calculates the total risk exposure amount in article 92(3) of the EU CRR, the own funds requirements referred to in article 92(3)(a) (Risk weighted exposure amount for credit risk and dilution risk) and article 92(3)(b) (Risk weighted exposure amount for position risk) should include only those arising from its designated investment business. For this purpose, managing an AIF or managing