UPDATE ON REGULATORY CAPITAL
Aberdeen Asset Management PLC ("Aberdeen") has been advised by the Financial Conduct Authority ("FCA"), following completion of its periodic review, that it is increasing the required minimum level of capital that should be held by Aberdeen for regulatory purposes. The Group's available capital remains comfortably above this new minimum requirement.
The increase in minimum regulatory capital has two roughly equal components. First, the FCA has removed the benefit of insurance mitigation when modelling operational risk for Pillar 2 purposes. Secondly, the FCA included an allowance ("scalar") to cover any unsighted and unquantifiable risks that may emerge in addition to the risks included in the Group's Pillar 2 capital requirements. This is an area that Aberdeen has previously sought to address by way of a self-imposed level of headroom above the formal regulatory capital requirement.
As a result of these changes, Aberdeen's total regulatory capital requirement will now be approximately £475 million (previously £435 million, inclusive of self-imposed headroom of £100 million). Since the nature of the risks covered by the new scalar are similar to those previously provided for by Aberdeen through the self-imposed headroom, the Board has decided to reduce the quantum of the self-imposed headroom on an ongoing basis.
This announcement contains inside information.
Neil Bennett + 44 (0) 207 379 5151
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