The FCA has pushed back the introduction of new capital adequacy requirements for advisers until December 2017 and plans to undertake a “fundamental review” of its proposed approach.
The rules, which will require all advisers to hold capital worth at least three months of their annual fixed expenditure, with a minimum of £20,000, were due to be implemented between December 2013 and December 2015.
However, the FCA has now published an amendment to its rules which delays implementation until between December 2015 and December 2017.
In a note to trade bodies sent this morning, the FCA said: “The new capital requirements for personal investment firms, which were published by the Financial Services Authority in 2009 and due to start a phased implementation on 31 December 2013, are being deferred for a period of two years and instead will now commence on 31 December 2015.
“Recent developments have led us to question whether the approach in the new rules remains the most appropriate.
“In particular, many firms are still implementing changes to their business models as a result of the retail distribution review and the European Banking Authority is undertaking work (under the Capital Requirements Directive) for non-PIFs, but which could be relevant to PIFs.
“Also, the FCA has a competition objective that was not present under the FSA and in their current format we believe the new rules would not necessarily be consistent with that objective.
“Therefore, we have decided to defer implementation of these rules for a further two years in order to allow a more fundamental review of our proposed approach.”
It is the third time the regulator has delayed the introduction of the new capital regime.