Creating an Effective ICAAP/ICARA

Outline & Objectives

The Individual Capital Adequacy Assessment Process (ICAAP) document is required of a large swathe of the investment firm population and the FCA has decided to use its SREP powers more aggressively to review the ICAAP and the process that underpins its creation at a firm. 

The Investment Firms Prudential Review will replace the ICAAP with the ICARA (Internal Capital and Risk Assessment) under which all investment firms will need to prepare for changes to the way in which they currently calculate their Pillar 2 capital and the FCA has signalled that there will be a move away from Individual Capital Guidance (“ICG”) to Pillar 2R and Pillar 2G. You will understand how the FCA considers how firms would transition.

This practical workshop is designed to equip delegates with an understanding of the relevant rules, practical requirements and transition considerations.

Making use of a running CASE STUDY throughout, this course will help those attending understand the core requirements and how to pull them together to create an effective ICAAP/ICARA that is more than just a “box-ticking” exercise and which can provide the basis for an effective ICARA under the new prudential regime

It will also help delegates understand what to expect from an FCA SREP and how to manage the process effectively.

Attending will help you:

1. Understand the central role the ICAAP/ICARA is intended to play in the Board’s strategic thinking and risk management activity
2. Understand the impact of the IFPR and FG 20/01
3. Review the regulatory requirements applicable
4. Examine the practical problems in creating an ICAAP/ICARA  and how to overcome them
5. Pillar 2R and 2G
6. Develop strategies for risk assessment
7. Appreciate the role of stress testing
8. Construct an appropriate winding-up plan and guidance
9. Prepare for a SREP

Who will benefit

The programme will benefit Compliance, Operational Risk and Internal Audit prrofessionals in regulated investment firms subject to the demands of the production, maintenance and review of an ICAAP document under BIPRU and IFPRU. It will be essential for anyone involved in the transition from the ICAAP to the ICARA.

It will also be of value to senior Finance and Chief Operating Officers who are involved in the production of the ICAAP and need to understand its place in the control and governance framework.

Training Approach

This workshop is typically based on a case study developed throught the programme, complemented by trainer input, knowledge sharing and interactive syndicate work.

Course Agenda

Topics may include but are not limited to:

• The role of the ICAAP/ICARA in governance and senior management decision-making
• Understanding the full extent of the regulatory requirements and expectations
• Constructing an ICAAP/ICARA
• Strategies for risk assessment
• Stress testing
• The winding-up plan and guidance
• Preparing for a SREP