IFPRU 1.1 Application and Purpose

There is no overall application for IFPRU. Each chapter or section has its own application statement. However, IFPRU broadly applies in the following manner:

1. (1)

   only IFPRU 7 (Liquidity) and IFPRU 9 (Public disclosure) apply to an exempt IFPRU commodities firm and IFPRU 8.1 (Prudential consolidation) may apply subject to the conditions in that section; and

2. (1A)

   IFPRU 101 (Capital buffers) applies to an IFPRU investment firm, unless it is an:

   1. (a)

      exempt IFPRU commodities firm; or

   2. (b)

      IFPRU limited-licence firm; and

3. (2)

   other than in (1) and (1A)1, the whole of IFPRU applies to an IFPRU investment firm.

1. (1)

   IFPRU applies to a collective portfolio management investment firm that is an IFPRU investment firm in parallel with IPRU(INV) 11 (see IPRU(INV) 11.6).

2. (2)

   Generally, IFPRU only applies to a collective portfolio management investment firm'sdesignated investment business (excluding managing an AIF and managing a UCITS). However, IFPRU 2.2 (Internal capital adequacy assessment process) and IFPRU 2.3 (Supervisory review and evaluation process: Internal capital adequacy standards) apply to the whole of its business.

1. (1)

   The purpose of IFPRU is to implement, in part, CRD and certain national discretions afforded to the FCA as competent authority under EU CRR.

2. (2)

   Save as provided in the Glossary, any expression in the Handbook for the purpose of IFPRU which is defined or used in EU CRR shall have the meaning given by, or used in, those Regulations.

In accordance with articles 95 and 96 of EU CRR, IFPRU investment firms are divided into the following categories:

1. (1)

   full-scope IFPRU investment firm;

2. (2)

   IFPRUlimited licence firm; and

3. (3)

   IFPRUlimited activity firm.

A firm whose head office is not in an EEA State is an investment firm if it would have been subject to the requirements imposed by MiFID (but it is not a bank, building society, credit institution, local firm2, exempt CAD firm and BIPRU firm) if:

1. (1)

   its head office had been in an EEA State; and

2. (2)

   it had carried on all its business in the EEA and had obtained whatever authorisations for doing so as are required under MiFID.

A firm also falls into one of the categories of an IFPRU investment firm listed in IFPRU 1.1.7 G (Types of IFPRU investment firm) or IFPRU 1.1.8 R (Alternative classification of IFPRU investment firms) if its Part 4A permission contains a requirement that it must comply with the rules in IFPRU applicable to that category of firm. If a firm is subject to such a requirement, and it would otherwise also fall into another category of IFPRU investment firm, it does not fall into that other category.

For the purposes of the definitions in IFPRU and Part Three, Title I, Chapter 1, Section 2 of the EU CRR (Own funds requirements for investment firms with limited authorisation to provide investment services), a person does any of the activities referred to in IFPRU and the EU CRR if:

1. (1)

   it does that activity anywhere in the world; or

2. (2)

   its permission includes that activity; or

3. (3)

   (for an EEA firm) it is authorised by its Home State regulator to do that activity; or

4. (4)

   (if the carrying on of that activity is prohibited in a state or territory without an authorisation in that state or territory) that firm has such an authorisation.

For the purposes of the definitions in IFPRU and Part Three, Title I, Chapter 1, Section 2 of the EU CRR (Own funds requirements for investment firms with limited authorisation to provide investment services), a person offers any of the services referred to in articles 95 and 96 of the EU CRR (Own funds requirements for investment firms with limited authorisation to provide investment services) if:

1. (1)

   it offers that service anywhere in the world; or

2. (2)

   any of IFPRU 1.1.15 G(1) to (4) apply.

For the purposes of the definitions in IFPRU and Part Three, Title I, Chapter 1, Section 2 of the EU CRR (Own funds requirements for investment firms with limited authorisation to provide investment services), a person has an authorisation to do any of the activities referred to in articles 95 and 96 of the EU CRR (Own funds requirements for investment firms with limited authorisation to provide investment services) if any of IFPRU 1.1.15 G(1) to (4) apply.