FCA shines spotlight on ICAAPs

With the Financial Conduct Authority now requesting to see Internal Capital Adequacy Assessment Processes across the investment business spectrum, is your firm’s ICAAP ready for the FCA spotlight? asks Mark Spiers.

Mark Spiers (mspiers@bovill.com) is head of banking, investments and lending at regulatory consultants Bovill. He has over 17 years’ experience in the financial services industry dealing with start-ups to the largest global institutions. Mark holds an LLB and MSc in regulation from the London School of Economics.

For many years firms have been required to make their own risk and capital assessments as well as to document their conclusions in an Internal Capital Adequacy Assessment Process (ICAAP). However, unlike banks, investment firms were not required to send the results from their annual ICAAP to their supervisors. While it is still not an annual requirement, the FCA now requests ICAAPs from across the investment business spectrum. Additionally, in September the FCA issued letters to CEOs reminding them of its new approach and providing information on what it expects ICAAPs to contain. Is your firm’s ICAAP ready for the FCA spotlight?