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FAQs: What is the purpose of the ICAAP?

Purpose of the ICAAP explained…

What is the purpose of the ICAAP?

The purpose of the Internal Capital Adequacy Assessment Process, or ICAAP, is to ensure that a Firm operates with an appropriate amount of capital at all times. It is this process that brings both capital management and risk management activities together so that they can then be used to support the overall business management and business decisions.

“The ICAAP should be a risk management tool used by the firm/group to inform business decisions; it should not be treated purely as a compliance exercise...and should be reviewed at least annually”

Andrew Bailey, CEO of the FCA, 22 September 2016 “Dear CEO to IFPRU Investment Firms”

“The Internal Capital Adequacy Assessment Process (ICAAP) is the firm's risk management process, not a document. It should be supported by effective policies, procedures, systems and controls and these should be reviewed as to their adequacy at least annually. This review should be documented.”

FCA, Regulation Roundup, December 2015

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ICAAP Support Services

If your firm would like information on our ICAAP support services such as assistance in examining your ICAAP to ensure it is appropriately assessed for your current business plan and activities or assistance in documenting this review, please contact us. Our experienced ICAAP Consultants would be happy to help, so send an enquiry or telephone today.

Telephone: 020 3813 2890