Pimfa has issued a warning to advisers on new regulations being introduced post Brexit.
The FCA, PRA and Treasury are all bringing forward regulations which the trade body warns will have significant impacts on UK wealth managers and large advisory firms.
Pimfa has specifically identified the Investment Firm Prudential Regime as one for firms to be aware of, due to its similar size and complexity to Mifid II.
IFPR is designed for Mifid II investment firms to ensure they have sufficient strength and resilience to withstand volatility of the economic cycle.
Firms with European subsidiaries will have to implement IFPR by June 2021. UK firms without this have only six months more implementation time.
Giulia Lupato, head of regulatory policy and compliance at Pimfa, said: “The IFPR will have a significant impact on Mifid investment firms and involves fundamental changes to the way in which they work.
“It is vital that firms begin to analyse how these changes will affect them and to begin to make preparations.”
Elsewhere, compliance departments will also have to contend with the FCA’s recently released final rules on building operational resilience. These come into force on March 31, 2021.
This means firms will have to carry out mapping and scenario testing to identify important business services, set impact tolerances and identify any vulnerabilities in their operational resilience.
“We are pleased to see the FCA has recognised that achieving operational resilience is a journey personal to each firm, as well as the challenges posed by third parties and supply chains,” added Lupato.
"We also appreciate the FCA agreeing to soften the initial, proposed deadline of three years from the date the rules come into effect by introducing a four-year ‘staged’ approach.”
With the UK’s Brexit transition period now completed, regulators are actively reviewing areas of regulation initially introduced by the EU.
For instance, the FCA has already announced it will review the 10 per cent drop rule that was introduced under Mifid II and forces firms to notify their clients of large portfolio drops.
Jon Yarker is a freelance reporter for FTAdviser
