IFPR (Investment Firm Prudential Regime), which takes effect on 1 January 2022, is a new regime put forward by the FCA and authorised under MiFID investment firms (Markets in Financial Instruments Directive). From January, there will be a single prudential regime for all FCA investment firms, which should result in improved competition between firms whilst reducing barriers to entry.
There are significant changes with IFPR, and this will inevitably create a lot of additional reporting and extra drain on company resources. With the introduction of the new regime quickly approaching, firms need a fast, efficient and accurate method of presenting their reports.
In the IFPR regime, a firm’s risk management and financial reporting are integrated. This means that a firm’s risk management systems also produce the data necessary to produce financial reports that satisfy IFPR reporting requirements.
IFPR reporting requirements fall into two categories: Data that firms are required to collect and monitor on an ongoing basis, risk-control and other business rules that firms are required to formally document and test.
By using bespoke automation tools you can remove much of the legwork associated with manual compliance and regulatory reporting. For example, final reports can be issued at a click of a button, rather than having to manually aggregate the data from different sources. This saves time, and consequently money, by freeing up employees to work on other tasks.
With the number of manual hours needed to compile complex reports, and the time-critical importance of meeting IFPR's new requirements, human mistakes are inevitable. By using fast and accurate report automation tools, you can reduce risks and present your reports with confidence while staying within your organisation's capital requirements/budget.
Regulatory compliance is becoming ever more complicated for UK investment firms. However, you can stay ahead of your competitors by employing compliance automation that is specifically built for your business model. This allows you to lead the way with efficiency and cost savings and lets you position your business as trustworthy to prospects and partners.
IFPR is a burden for many companies that need to adhere to the myriad of new requirements. Whether we are talking about "own funds" and liquid assets reporting, or other types, using automation tools ensures you're more prepared, organised and confident in the event of an audit. What's more, automation is the future, and those that invest early in streamlining their processes will stay ahead of the competition.
To recap, with IFPR, firms will be required to collect and monitor additional data and comply with new rules governing risk and financial reporting. The new rules will create a level playing field, but firms can use the rules to gain a competitive advantage. Financial firms should begin preparing for compliance with the new rules now, as doing so will reduce costs and help firms better manage risk.
Synetec has recently helped several companies prepare for IFPR by building a bespoke tool that allows them to efficiently pull reports and ensure compliance.
Come have a complimentary assessment meeting and let us help you transition to the new regime.
Also, you can dive into a more exhaustive list of changes by downloading our Ultimate Guide to IFPR today.
If you would like to discuss a bespoke software development project, challenge or goal please book a 30 minute Clarity Call with us and we'll point you in the right direction (even if you chose not to work with us)
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