Tenet: Don't be misled by £20,000 cap ad headline figure

Group chief executive Martin Greenwood warned small directly authorised firms just holding £20,000 as a capital buffer may not be enough to be compliant. Under the new regulations, which take effect on 30 June, firms will need to hold the greater of £20,000 or 5% investment income, plus 2.5% of any non-investment insurance or mortgage income in spare capital. However, the capital must not be made up of illiquid assets and has to be readily realisable - able to be turned into cash within 90 days. The minimum requirements must also be maintained at all times, not just the date at which ...