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MIFIDPRU 4.4 Permanent minimum capital requirement

MIFIDPRU 4.4.1R
  1. (1)

    1Where a MIFIDPRU investment firm has permission to carry on any of the investment services and/or activities in (2), its permanent minimum capital requirement is £750,000.

  2. (2)

    The relevant investment services and/or activities are:

    1. (a)

      dealing on own account;

    2. (b)

      underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis; or

    3. (c)

      operating an organised trading facility, if the firm is not subject to a limitation that prevents it from carrying on the activities otherwise permitted by MAR 5A.3.5R.

MIFIDPRU 4.4.2G
  1. (1)

    1Under MAR 5A.3.5R (Proprietary trading), a firm that has permission to operate an organised trading facility may deal on own account in the following ways without requiring separate permissions for dealing on own account:

    1. (a)

      matched principal trading in the course of operating the OTF; or

    2. (b)

      dealing on own account in relation to sovereign debt instruments for which there is no liquid market.

  2. (2)

    A firm that is operating an organised trading facility and does not wish to carry on the activities in (1) may apply to the FCA under section 55H of the Act for a limitation that prohibits the firm from carrying on the activities on the basis of that permission.

  3. (3)

    The effect of MIFIDPRU 4.4.1R(2)(c) is that if a firm is operating an organised trading facility and is not subject to the limitation described in (2), the firm’s permanent minimum capital requirement is £750,000.

MIFIDPRU 4.4.3R
  1. (1)

    1Where a MIFIDPRU investment firm satisfies the conditions in (2), its permanent minimum capital requirement is £150,000.

  2. (2)

    The relevant conditions are:

    1. (a)

      the firm has permission for any of the following:

      1. (i)

        operating a multilateral trading facility;

      2. (ii)

        operating an organised trading facility, if the firm is subject to a limitation that prevents it from carrying on the activities otherwise permitted by MAR 5A.3.5R;

      3. (iii)

        holding client money or client assets in the course of MiFID business; and

    2. (b)

      the firm does not have permission for any of the following:

      1. (i)

        dealing on own account;

      2. (ii)

        underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;

      3. (iii)

        operating an organised trading facility, if the firm is not subject to a limitation that prevents it from carrying on the activities otherwise permitted by MAR 5A.3.5R.

MIFIDPRU 4.4.4R
  1. (1)

    1Where a MIFIDPRU investment firm satisfies the conditions in (2), its permanent minimum capital requirement is £75,000.

  2. (2)

    The relevant conditions are:

    1. (a)

      the only investment services and/or activities that the firm has permission to carry on are one or more of the following:

      1. (i)

        reception and transmission of orders in relation to one or more financial instruments;

      2. (ii)

        execution of orders on behalf of clients;

      3. (iii)

        portfolio management;

      4. (iv)

        investment advice; or

      5. (v)

        placing of financial instruments without a firm commitment basis; and

    2. (b)

      the firm is not permitted to hold client money or client assets in the course of MiFID business.

MIFIDPRU 4.4.5G

1The relevant permanent minimum capital requirement under this section applies to a collective portfolio management investment firm in parallel with its base own funds requirement under IPRU-INV 11. This means that a collective portfolio management investment firm must comply with both requirements, but they are not cumulative.