The final rule comes into effect on 30 June 2017
Put briefly - if your annual income is less than £400,000 your prudential requirement will be a minimum of £20,000 from 30 June 2017. Any income above that means your cap ad is 5% of that number.
Of the £20k, some £15k must either be share capital or retained profit.
Only £5k can now be subordinated loan only.
In reality, your next Gabriel return will check your cap ad is correct.
If the numbers are wrong - or rather not sufficient to pass the cap-ad - you cannot submit the data. A slightly alarming fact! In order to avoid the fine for late delivery it forces you to input incorrect figures and then contact the FCA at the same to request a re-submission or inform them that the data is wrong and that you actually fail the cap ad.
If you do that you risk a suspension of your licence until the cap ad is sorted out. That is not an unreasonable response from the FCA. Remember that the test must be passed “at all times”, so Gabriel is just a final checker. One final point – for exempt CAD firms the requirements are in Euro, and we generally recommend £25k cap ad minimum.
Unlike other support operations, IFAC nearly always submit gabriel returns for their members - making members' lives easier.
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