The Financial Conduct Authority's (FCA) new Internal Capital Adequacy and Risk Assessment (ICARA) policy represents a significant shift in regulatory expectations for financial services firms in the UK. Introduced as part of the broader Investment Firms Prudential Regime (IFPR), ICARA replaces the previous ICAAP (Internal Capital Adequacy Assessment Process) and aims to enhance the resilience of firms by ensuring they maintain adequate capital and liquidity relative to their risk profiles.

The ICARA policy places greater emphasis on forward-looking risk management and encourages firms to adopt a more holistic approach to assessing their financial health, integrating stress testing and scenario analysis. This change reflects the FCA's commitment to fostering a more robust and proactive risk management culture within the industry, ensuring that firms are better prepared to navigate financial uncertainties and protect client interests.

Hagan Smith can provide assurance with your ICARA submissions whether it be a health check, implementation of recommendations from the health check.