Investment Firm (Wholesale)

Wholesale Investment Firms in the UK, authorised by the Financial Conduct Authority (FCA), offer specialised investment services to institutional clients and large corporations. These firms focus on large-scale transactions in the capital markets, providing advisory services and facilitating complex financial operations. Unlike retail-focused firms, wholesale investment firms operate with fewer restrictions, allowing for businesses gain the flexibility to meet the unique demands of institutional clients,

Overview

Services Provided

Advising on investments
Arranging deals in investments
Making arrangements for transactions in investments
Dealing in investments as agent

Capital Requirements

Wholesale investment firms are required to hold a minimum capital of £75,000 (Permanent Minimum Requirement or PMR) under MiFIDPRU, but firms dealing with large transactions or complex financial products may need to hold more capital based on their risk exposure.

Transaction Limitations

Wholesale firms must comply with anti-market abuse regulations. Transactions are subject to oversight and transparency requirements.

Safeguarding Requirements

Must adhere to FCA rules on client asset protection, but with less stringent rules compared to retail investment firms.

Jurisdictional Limitations

Can operate across borders under passporting, but subject to local laws.

Legal & Regulatory Framework

MiFID
MiFIDPRU
FCA Market Abuse Regulation

Key Restrictions

Restricted from selling to retail clients.
Cannot engage in speculative or high-risk investments without specific permissions.

Regulatory authorisation process

The Financial Conduct Authority (FCA) usually assesses a complete application within 6 months.

Depending of the type of application submitted, the Financial Conduct Authority (FCA) will require a fee ranging between £10,880 and £54,380

Exemptions & exclusions

Excluded bodies

Under MiFID, specific entities are exempt for standard egulatory requirements: Insurers

Certain intra-group service providers

Public financial institutions

Pension schemes

These exemptions provide flexibility for institutions managing specific investment activities within the EU.

Excluded activities

MiFID II regulations also exclude specific activities, such as: Intra-group services

Own-account dealing

Commodity trading under the ancillary activity exemption, provided they remain secondary to a firm’s main business.

Additional exemptions apply under Article 3 for qualified UK firms, and reverse solicitation provisions allow third-country firms to serve clients without establishing a branch under certain conditions.

Regulatory Updates

Deep dive into Investment Firm (Wholesale)

Introduction

Expand your financial services by becoming a Wholesale Investment Firm in the UK, authorised by the Financial Conduct Authority (FCA). Wholesale firms provide investment services to institutional clients and large corporations, including advising on investments and facilitating large-scale transactions. With fewer restrictions compared to retail firms, this licence allows businesses to operate across borders while complying with MiFID and FCA regulations.

Definition

Wholesale Investment firms provide investment services to institutional clients and large entities, focusing on large-scale transactions in the capital markets. Wholesale investment firm UK must comply with MiFID wholesale firm regulations.

Additional Information (Services)

Advising on investments: Offering advice on investment decisions tailored to institutional or corporate clients under MiFIDPRU compliance.
Arranging deals in investments: Coordinating transactions between large clients and third parties, following MiFID wholesale firm regulations.
Making arrangements for transactions: Facilitating large-scale transactions on behalf of clients.
Dealing in investments as agent: Acting as an intermediary to execute client orders while ensuring compliance with Market Abuse Regulation FCA.

Additional Information (Legal & Regulatory Framework)

MiFID: Establishes guidelines for cross-border investment services in the EU.
MiFIDPRU: Provides capital and operational requirements for wholesale investment firms.
FCA Market Abuse Regulation: Ensures transparency and prevents market abuse through strict oversight.

Additional Information (Key Restrictions)

Wholesale firms cannot target retail clients and are limited to large-scale institutional trading. They are subject to strict reporting and transparency rules to avoid market manipulation and abuse.