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Item 5 - Regulatory Capital Requirements (P21/7)


It is a requirement for the operator of an Authorised Contractual Scheme to have a sufficient level of regulatory capital (‘own funds’ ) in place at all times. This capital must be readily available (liquid or invested in near-cash assets) to ensure the ongoing viability of a company faced with an unforeseen event that might otherwise cause its insolvency and to cover the potential exposure of the company to professional liability in respect of all its activities, including the management of funds under delegated mandates.
This report presents the committee with detailed information about the regulatory capital regime and asked for the committee to agree the proposals outlined to address the regulatory capital requirement.


The committee is recommended to:
i.    Consider the issues raised in this report; 
ii.    Agree to the proposal outlined in paragraph 16; 
iii.    Decide which of the three options outlined in paragraph 19 should be adopted, with regard to the proposal given in paragraph 20.