IFAs could be worst affected by requirements to implement the Capital Requirements Directive because of the impact it will have on calculating capital.
Developed from the Basle II directive, the latest proposals for CRD are designed to secure capital requirements on larger institutions, however, the FSA acknowledges this current plans also require financial advisers to substantially increase the capital they hold to meet adequacy requirements. “The CRD does not make particular provisions discriminating for or against smaller firms or investment firms,” says the FSA in its Feedback Statement FS05/1 to Consultation Paper <05/3 entitled Strengthening Capital Standards. “But we recognise that, in practice, particular implementation challe...
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