Key Insights

  • Many firms will fall below the defined thresholds and will be categorised as small and non-interconnected firms (SNI).

  • Of the firms we assessed, 76% meet the criteria for classification as SNI. This is broadly in line with the FCA’s stated expectation of the proportion of UK investment firms to fall into the SNI regime. This means they will be subject to proportionally fewer rules and less scrutiny than non-SNI firms.

  • Wheelhouse Advisors supports firms in fully understanding the thresholds and calculations that define each category.

When the IFPR is implemented, most investment firms will no longer be under the scope of the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) framework, or that of any of its legacy iterations. It replaces all the current prudential categories for MiFID investment firms such as Exempt CAD, BIPRU, and the various IFPRU categories. It also affects Collective Portfolio Management Investment (CPMI) firms which are currently in the BIPRU or IFPRU prudential category as a result of their MiFID activities. 

Understanding which category they will be in is the first step firms must take. Firms which fall towards the simpler and smaller end of the investment firm spectrum are exempt from certain aspects of the new regime. The criteria for these small and non-interconnected (SNIs) firms are to come below the thresholds for the following:

  • Assets under management
  • Client orders handled
  • Assets safeguarded and administered
  • Client money held
  • Total amount gross revenue from investment services and activities
  • On and off balance sheet total

Wheelhouse Advisors has made the calculations and assessed each client against the criteria to categorise them appropriately.

The Findings

  • Of the firms we assessed, 76% will be categorised as small and non-interconnected or SNI firms. 24% will be non-SNI.

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