Frequently Asked Questions

UK: What are the requirements for "regulatory capital" for a financial services firm?

Many financial services firms, along with all UK regulated firms, are required to hold enough liquid assets to protect their customers and their customers' funds against the risk of the firm becoming insolvent. 

Retained assets must meet certain criteria to count towards regulatory capital, so it is important to note that share options and preferential shares do not, in themselves, count towards regulatory capital. 

If you are considering a financing round, careful consideration should be had to the financing terms and structure of the round to ensure regulatory capital compliance.

Learn More: UK Founder Series: Financial Services Startups