As will be known (see e.g. Regulatory Roundup 50), CRD IV comes into force on 1 January, although certain BIPRU firms will be able to remain on the current GENPRU/BIPRU (CRD III) regime.
The FCA has recently contacted a number of firms to provide them with the opportunity to apply for a simple Variation of Permission (VoP) (subject to meeting specific requirements) which will mean that they will remain outside of CRD IV.
Those firms that are able to take advantage of the VoP should respond by the FCA deadline of 20 November 2013. If you do not respond then the FCA will assume that your firm will be subject to the CRD IV rules and the firm will be expected to comply with them from 1 January 2014. Note that there is both a dedicated email address and FCA unit for dealing with the VoP (although not for queries).
Even if you have not received such a communication, and you are unsure which regime your firm will fall under, then it would be worthwhile considering whether the VoP would be relevant to you – the links will provide the necessary information to help reach a decision. Queries should be directed to your usual supervisory contact.
In brief, if you are a BIPRU firm now and do not undertake any of the following MiFID activities then you will be eligible to take advantage of the VoP (see ‘useful links’ on preceding page which also provide further information):
- Dealing on own account
- Placing of financial instruments without a firm commitment basis
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis
- Operation of Multilateral Trading Facilities
In addition you must not:
- Carry on the service of safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management; or
- Be permitted to hold money or securities belonging to a client
