IFPRU 11.2 Individual recovery plans

This section applies to an IFPRU 730k firm that is not subject to supervision on a consolidated basis.

A firm must draw up and maintain a recovery plan.

[Note: article 5(1) of RRD]

If a firm is a significant IFPRU firm, its recovery plan must include the information in IFPRU 11 Annex 1R (Contents of recovery plans for significant IFPRU firms and group recovery plans for groups that include significant IFPRU firms).

[Note: article 5(5) of RRD]

If a firm is not a significant IFPRU firm its recovery plan must include:

1. (1)

   a summary of the key elements of the recovery plan;

2. (2)

   information on the governance of the firm, including:

   1. (a)

      how the recovery plan is integrated into the corporate governance of the firm; and

   2. (b)

      the firm's overall risk management framework;

3. (3)

   a description of the legal and financial structures of the firm, including:

   1. (a)

      the core business lines; and

   2. (b)

      critical functions;

4. (4)

   recovery options, including:

   1. (a)

      capital and liquidity actions required to maintain or restore the viability and financial position of the firm; and

   2. (b)

      arrangements and measures to conserve or restore the firm'sown funds;

5. (5)

   an assessment of the expected timeframe for implementing recovery options;

6. (6)

   a summary of the overall recovery capacity of the firm, including:

   1. (a)

      the risks associated with recovery options;

   2. (b)

      an analysis of any material impediments to the effective and timely execution of the recovery plan; and

   3. (c)

      whether and how material impediments could be overcome;

7. (7)

   a summary of any material changes to the recovery plan since the previous version was sent to the FCA;

8. (8)

   preparatory measures the firm has taken or plans to take to help implement the recovery plan; and

9. (9)

   the measures which the firm could take if it has infringed an RRD early intervention condition or is likely to infringe one of those conditions in the near future.

[Note: articles (4)(1), 5(5) and Annex A of RRD]

A firm must not assume any access to, or receipt of, extraordinary public financial support in its recovery plan.

[Note: article 5(3) of RRD]

If the recovery plan includes the use of central bank facilities, the firm must:

1. (1)

   include an analysis of how and when the firm may apply for the use of central bank facilities; and

2. (2)

   identify those assets which would be expected to qualify as collateral.

[Note: article 5(4) of RRD]

A firm must:

1. (1)

   include a framework of indicators in its recovery plan which identify when it may take appropriate actions in the plan;

2. (2)

   ensure the recovery plan indicators can be monitored easily; and

3. (3)

   have arrangements to monitor the recovery plan indicators regularly.

Where the relevant indicator has not been met, a firm must decide whether or not it is appropriate to take action under its recovery plan.

A firm must notify the FCA without delay of a decision to take an action referred to in its recovery plan or of a decision not to take action.

[Note: article 9(1) of RRD]

A firm must ensure its management body assesses and approves the recovery plan before sending it to the FCA.

[Note: article 5(9) of RRD]

A firm must demonstrate to the FCA that:

1. (1)

   carrying out its recovery plan is reasonably likely to maintain or restore the viability and financial position of the firm, taking into account the preparatory measures that the firm has taken, or plans to take; and

2. (2)

   its recovery plan:

   1. (a)

      is reasonably likely to be carried out quickly and effectively in situations of financial stress; and

   2. (b)

      avoids, to the maximum extent possible, any significant adverse effect on the financial system, including in scenarios which would lead other RRD institutions to implement recovery plans and group recovery plans at the same time.

[Note: article 6(1) of RRD]

1. (1)

   A significant IFPRU firm must update its recovery plan at least annually.

2. (2)

   A firm that is not a significant IFPRU firm must update its recovery plan at least once every two years.

3. (3)

   A firm must also update its recovery plan after a change to any of the following which could materially affect its recovery plan:

   1. (a)

      its legal or organisational structure;

   2. (b)

      its business; or

   3. (c)

      its financial situation.

[Note: articles 4(1)(b) and 5(2) RRD]

A firm must send its recovery plan to the FCA in line with SUP 16.20 (Recovery plans and information for resolution plans).

[Note: article 6(1) of RRD]