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Response by the FIA EPTA to the FCA Discussion Paper on a new UK prudential regime for MiFID investment firms

17 September 2020

FIA EPTA appreciates the opportunity to provide feedback to the Financial Conduct Authority (FCA) on its Discussion Paper regarding the implementation of the new UK prudential regime for MiFID investment firms. Market making and liquidity provision (also referred to as principal trading or dealing on own account) is a distinct activity that is undertaken by non-systemic investment firms rather than banks, in a highly dispersed and varied ecosystem of independent Principal Trading Firms. As such, we have consistently welcomed the new prudential regime for investment firms contained in the EU Investment Firm Regulation and Directive (IFR/IFD), which is aimed at creating a tailored and proportionate prudential framework for firms such as those we represent. In line with this, we have consistently argued for a robust, fair and proportionate prudential regime to be applied to our members. Therefore, our members strongly welcome the Government’s intention, as communicated by HM Treasury, to introduce a new prudential regime for investment firms in the UK by means of the Investment Firms Prudential Regime (IFPR).

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