Investment firms, including wealth managers, financial advisers and brokers, will have noted the Financial Conduct Authority's recent consultation on the definition of capital for FCA investment firms. The consultation contains amendments to its Prudential Sourcebook for MiFID Investment Firms, or MIFIDPRU. The MIFIDPRU governs regulatory capital — the funds that the FCA requires a firm to hold in order to help the firm avoid insolvency and, if the firm becomes insolvent, to help it be wound down in an orderly manner that protects the integrity of the financial system and the firm's customers. Investors in those firms, such as venture capital and private equity funds, should also take note. Hidden in the FCA proposals are changes to the eligibility requirements for instruments, such as shares, to be included in a firm's regulatory capital. This change will potentially reduce the risk of investing, especially in early-stage fintech firms. For more, read the full article by Financial Services and Private Investment Funds partner Andrew Henderson in Law360.