FSA-authorised firms are required to maintain an amount of their capital in reserve. The required level is set by the FSA, based on the risk that the regulator attach to the firm’s activity.
One City-based corporate finance firm which we advise, began with a required capital reserve of €730,000. We were able to reduce this to €150,000 by removing some permissions that they did not use and by better explaining to the FSA the actual activity undertaken within other permissions. We were then able to create a corporate restructuring plan to form a holding company which further reduced the capital requirement to €50,000. This effectively freed up €680,000 of our client’s money to be spent on other things (investment, development, new business projects, dividends to shareholders… now it’s up to them!).
If you would like to discuss whether your capital requirement can be reduced, please do call or e-mail us.
