Chapter 8 of the FCA Handbook sets out the public disclosure rules and guidance applicable to MiFIDPRU investment firms, with which Spectra must comply.

Spectra FX Solutions LLP is classified under MiFIDPRU as a non-interconnected MiFIDPRU Investment Firm (Non-SNI MiFIDPRU Investment Firm). Therefore, the firm is required to disclose the following information:

• Risk Management objectives and policies (MiFIDPRU 8.2);
• Governance arrangements (MiFIDPRU 8.3);
• Own Funds (MiFIDPRU 8.4);
• Own Funds Requirements (MiFIDPRU 8.5);
• Remuneration policies and practices (MiFIDPRU 8.6); and
• Investment Policy (MiFIDPRU 8.7)

Firms must publicly disclose the information on the date it publishes its annual financial statement. Additional disclosures can also occur if a significant change to the business model occurs, or a merger has occurred. The purpose of these disclosures is to give stakeholders and market participants an insight into the firm’s culture and financial stability.

When making these disclosures firms must apply the following under MiFIDPRU 8.1.13:

• information is easily accessible and free to obtain;
• clearly presented and easy to understand;
• it is consistent with the presentation used for previous disclosures periods or otherwise allows readers to make comparisons easily; and
• highlights in a summary any significant changes to the information disclosed, when compared with previous disclosure periods.

Spectra will publish their annual disclosures on their company website under the designated disclosure page.

Spectra confirms that the disclosures in this document are consistent with those published in the prior disclosure period. The only changes made relate to updated financial information for the reporting period and minor grammatical or drafting amendments. No material or significant changes have been made to the firm’s business model, governance arrangements, risk management framework, own funds, or remuneration policies.

MiFIDPRU 8.2 expects firms to disclose risk management objectives and policies for the categories of risk in the following areas:

• Own funds requirements
• Concentration risk
• Liquidity

Spectra FX Solutions LLP (Spectra) is Limited Liability Partnership (OC325309) whose principal activity is that of a agency broker in Foreign Exchange. Spectra is an independent, global, broker-dealer offering execution and research services across Foreign Exchange products in the U.S., Europe, and Asia. Spectra provides a service to Professional Clients and Eligible Counterparties.

Spectra was founded in London as a private partnership in 2007 with locations in New York and London.

Spectra is authorised and regulated with firm reference number No.521446 since December 2010, and currently holds the following regulatory permissions:

• Advising on investments (except on pension transfers & pension opt outs);
• Advising on P2P agreements;
• Agreeing to carry on a regulated activity;
• Arranging deals in investments;
• Dealing in investments as an agent;
• Dealing in investments as a principal; and
• Making arrangements with a view to transactions in investments

The firm’s strategy is to operate an agency execution model within the FX market, providing efficient and competitively priced execution to professional clients. The basis of the model is to aggregate bank and electronic liquidity in one centralized venue to access best pricing and significantly reduce execution slippage.

Spectra is required to maintain its own funds that are at least equal to the calculated own funds requirement. This is determined by one of the following:

• Permanent Minimum Capital Requirement (PMR): This represents the minimum level of funds that firms must maintain at all times, as determined by the FCA, in order to operate. Based on Spectra’s MiFID investment services, activities and permissions, the PMR is £750,000. However, Spectra is currently benefiting from the transitional provisions under MiFIDPRU, and accordingly the applicable PMR for the current period is £610,000.

• Fixed Overhead Requirement (FOR): This amount is equal to at least one quarter of Spectra’s fixed overheads for the previous year;
• K-Factor Requirement (KFR): KFR is calculated for the minimum amount of capital required for Spectra for the ongoing operations of the business. The K-Factor calculation that applies to Spectra is K-COH (client orders handled).

Spectra’s own funds requirement is calculated by the Fixed Overhead Requirement, due to being the highest of the three figures.

The potential harm associated with Spectra’s business strategy, based on the fixed own funds requirement is low. This is due to several factors including consistent and stable growth seen throughout the year and anticipated for the following year. Spectra has also ensured that own funds and the own funds requirement are closely reviewed and calculated on a regular basis and any changes are raised to the firms governing body. This approach should ensure that the appropriate levels of funds are maintained but also ensures that the relevant actions are considered, this could include an injection of funds into the firm, alongside informing the FCA.

The potential harm to Spectra’s business strategy associated to the concentration risk is low.

The top ten clients account for approximately 72% of total annual revenue based on FY2025 actuals, with the top five clients generating 48%. The largest single client represents 17.5% of annual income, and the loss of this client would equate to an estimated revenue reduction of £1.5m. While such a loss would materially reduce profitability and staff remuneration, it would not threaten the firm’s ability to meet its fixed overheads, capital requirements, or liquidity needs. The business model is sufficiently resilient that losing several top clients would require the firm to increase business development activity or reduce overheads to maintain long term viability. When assessed against the firm’s risk matrix, these outcomes fall within the firm’s defined low‑impact tolerance levels under its risk assessment framework; therefore, no additional capital is required under the Own Funds Threshold Requirement. Notwithstanding this assessment, concentration risk arising from revenue dependency is monitored closely through monthly reporting to senior management.

Geographic concentration has also been assessed. Over 50% of Spectra’s clients are non UK based, meaning regulatory, political, or economic developments in key jurisdictions could impact revenue flows. For example, a significant portion of clients are US based. The trading and regulatory environment between the UK and US remains stable, and the Compliance team conducts continuous horizon scanning to monitor potential regulatory changes. Any material jurisdictional shift would provide sufficient lead time for Spectra to adapt and therefore does not present a material risk of harm to the firm, its clients, or the wider market. Broader geopolitical developments such as the UK’s departure from the EU are also considered; however, Spectra’s client distribution and execution model provide sufficient diversification to mitigate such risks.

Spectra maintains sufficient liquidity to ensure to not be exposed to risks that its’ liabilities cannot meet. The potential harm to Spectra’s business strategy based on the basic liquid assets requirement is low. The financial position of the firm is monitored by the Chief Financial Officer on a regular basis throughout each month.

Similarly to the own fund’s requirement, this is due to the consistent growth in the revenue of the firm over the past year and the anticipated further growth in the upcoming year too.

Due to the nature of the business, whereby the only test of liquidity is a lack of ability to meet the own funds requirement, the Contingency Funding Plan is not expected to be utilised under normal operating conditions. The CFP is reviewed annually and is approved by the board. However, should Spectra be in requirement of further funds, this could be provided by the partners, or this would be provided by the liquid assets in the firm If this was not forthcoming, Spectra would have sufficient funds within the capital requirement to perform an orderly closure/wind-down.

The liquidity risk within Spectra is not considered to pose a material risk to the market as all positions are matched and given up.

Spectra’s risk management oversight is performed by the compliance department, ensuring impartial oversight and effective governance. The control framework has been designed in order to ensure that it remains effective and aims to identify, monitor and manage risks arising in the business. The Compliance department provide regular updates to senior management to maintain transparency and alignment with regulatory expectations.

Risk appetite represents the level and type of risk that Spectra is willing to accept in pursuit of its strategic objectives. It is set and monitored by senior management and is fully integrated into the firm’s strategy and business planning. Senior management recognises that risk is inherent in all business activity, and has defined the firm’s appetite for risk as follows:

Unacceptable      No appetite; action must be taken immediately to reduce the impact and/or likelihood of the risk occurring.

Tolerated              Appetite exists however must ensure that an action plan is devised to increase mitigation.

Acceptable           Appetite exists however, keep current action plan/mitigation under general review.

The Board’s overall appetite for risk is such that in total the capital resources required to cover these risks do not exceed the K-Factor Requirement. The final decision on any new risk is determined and this includes new clients, products, trade limits. The risk appetite for the group sits in the low to medium impact and rare to unlikely section of the matrix.

When risks are identified they are recorded in the Risk Register. Each risk is assessed based on its potential impact on the firm, its staff, clients or the wider market. The Risk Register is reviewed at least annually; however, new risks identified during the year are added as part of the ongoing risk management process.

For the purposes of the ICARA documents, only risks that meet the criteria of being assessed as possible or likely with a high or critical impact are treated as material and incorporated into the ICARA for enhanced monitoring and oversight. All other risks continue to be managed through standard controls and routine monitoring to ensure they remain within the firm’s risk appetite.

Information on the risks the firm faces and how it manages them is gathered by reviewing company records, including financial statements and control documents. The management of the company are regularly updated with the financial position of the firm and are involved in the day-to-day running of the business. Monthly balance sheets and P&L is sent to the management as well as liquidity report.

Spectra’s governing body consists of the CEO, CFO, COO and Senior Partners, who are all attentive to developments in the market, compliance issues in the conduct of the business and the management of the financial risks associated in the running of this type of company. Due to this in-depth engagement by key stakeholders and the activities of the company, Spectra believes it has effective governance arrangements to help the firm to achieve its strategic objectives while also ensuring that the risks to the firm, its stakeholders, and the wider market are identified, managed, and mitigated.

Spectra’s governing body meets on a monthly basis and has the responsibility to approve and oversee the implementation of the firm’s strategic objectives, risk strategy and internal governance, oversee the process for disclosure and communications, ensures the integrity of the firm’s accounting and financial reporting systems, ensures compliance with the requirements of the regulatory system, assesses the adequacy of policies relating to the provision of services to clients, and has adequate access to information and documents needed to monitor management decision-making.

Spectra promotes an inclusive working environment throughout the firm including the management body, in which diversity is recognised, valued, and encouraged. We acknowledge the multi-cultural and diverse nature of the UK workforce and society in general. We are committed to principles of fairness and mutual respect where everyone accepts the concept of individual responsibility. Everyone we employ has a role to play in the development of our organisation.

As of 31 December 2025, Spectra maintained own funds of £1,000,000. The prescribed templates set out below are prepared in accordance with MiFIDPRU 8 Annex 1R

Composition of Regulatory Own Funds
	Item	Amount (GBP Thousands)	Source Based on Reference Numbers/Letters of the Balance Sheet in the Audited Financial Statements
1	OWN FUNDS	1000	N/A
2	TIER 1 CAPITAL	1000	N/A
3	COMMON EQUITY TIER 1 CAPITAL	1000	N/A
4	Fully paid-up capital instruments	1000	N/A
5	Share premium	0	N/A
6	Retained earnings	0	N/A
7	Accumulated other comprehensive income	0	N/A
8	Other reserves	0	N/A
9	Accumulated other comprehensive income	0	N/A
10	Accumulated other comprehensive income	0	N/A
11	(-) TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1	0	N/A
19	CET1: Other capital elements, deductions, and adjustments	0	N/A
20	ADDITIONAL TIER 1 CAPITAL	0	N/A
21	Fully paid up, directly issued capital instruments	0	N/A
22	Share premium	0	N/A
23	(-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1	0	N/A
24	Additional Tier 1: Other capital elements, deductions, and adjustments	0	N/A
25	TIER 2 CAPITAL	0	N/A
26	Fully paid up, directly issued capital instruments	0	N/A
27	Share premium	0	N/A
28	(-) TOTAL DEDUCTIONS FROM TIER 2	0	N/A
29	Tier 2: Other capital elements, deductions, and adjustments	0	N/A

 

Own Funds: Reconciliation of Regulatory Own Funds to Balance Sheet in the Audited Financial Statements
		Balance Sheet as in Published/Audited Financial Statements	Under Regulatory Scope of Consolidation	Cross-Reference to Above Template
		As at period end 2025	As at period end 2025
Assets – Breakdown by Asset Classes According to the Balance Sheet in the Audited Financial Statements (GBP Thousands)
1	Fixed Assets	7
2	Current Assets	4,672
3	Total Assets	4,679
Liabilities – Breakdown by Liability Classes According to the Balance Sheet in the Audited Financial Statements (GBP Thousands)
1	Creditors: amounts falling due within one year	3,679
2	Creditors: amounts falling due after more than one year	0
3	Total Liabilities	3,679
Shareholders’ Equity (GBP Thousands)
1	Loans and other debts due to members	0
2	Members’ other interests	1,000
3	Total Shareholders’ Equity	1,000

 

Own Funds: Main Features of Own Instruments Issued by the Firm

Spectra’s own funds consist of the below main features of the own funds issued by the firm are highlighted below:

Partnership Capital

According to the FCA in MIFIDPRU 4.3.1 a firm must always maintain own funds that are equal to its own fund’s requirements.

The own funds requirement is the minimum requirement of capital the firm is required to hold, taken as the higher of the PMR, KFR and FOR.

The below illustrates the core components of Spectra’s own funds requirements:

Requirement		£’000
(A) Permanent Minimum Capital Requirement (“PMR”)		610
(B) Fixed Overhead Requirement (“FOR”)		726
(C) K-Factor Requirements (“KFR”)		336
–        K-COH – Risk arising from order execution and reception and transmission of orders
(D) Own Funds Requirement (Higher [A, B, C])		726

Spectra is required to comply with overall financial adequacy rule (“OFAR”) set out within MiFIDPRU 7.4.7R. This is an obligation on Spectra to hold own funds and liquid assets which are adequate, both as to their amount and quality, to ensure that:

• The Firm is able to remain financially viable throughout the economic cycle, with the ability to address any material potential harm that may result from its ongoing activities; and
• The Firm’s business can be wound down in an orderly manner, minimising harm to consumers or to other market participants.

Within the Liquid Asset Threshold requirement Spectra has factored the effective management of prudential risk, processes, strategies, and systems which are proportionate to the nature, scale, and complexity of the firm’s activities. These have been assessed in relation to the activities of this firm and the risks to which they give rise.

A cash flow projection has been made and is regularly reviewed against the capital adequacy requirement. Any new business or expansion of the company would be a material change and the cash flow projections would be reviewed in the anticipation of the new developments.

Stress testing of the liquidity requirement is proportionate to Spectra. Due to the nature of the business, the liquidity in Spectra is regularly monitored against the actual requirement, forecast requirement and income. The requirement is relatively constant and the income, whilst fluctuating slightly, is not a significant short-term influencer to the liquidity of the company. The ultimate stress test is to see how long the company could survive, with the capital adequacy intact, with no income whatsoever.

Spectra required to comply with overall financial adequacy rule (“OFAR”) set out within MiFIDPRU 7.4.7R. This is an obligation on Spectra to hold own funds and liquid assets which are adequate, both as to their amount and quality, to ensure that:

• The Firm is able to remain financially viable throughout the economic cycle, with the ability to address any material potential harm that may result from its ongoing activities; and
• The Firm’s business can be wound down in an orderly manner, minimising harm to consumers or to other market participants.

Within the Liquid Asset Threshold requirement Spectra has factored the effective management of prudential risk, processes, strategies, and systems which are proportionate to the nature, scale, and complexity of the firm’s activities. These have been assessed in relation to the activities of this firm and the risks to which they give rise.

A cash flow projection has been made and is regularly reviewed against the capital adequacy requirement. Any new business or expansion of the company would be a material change and the cash flow projections would be reviewed in the anticipation of the new developments.

Stress testing of the liquidity requirement is proportionate to Spectra. Due to the nature of the business, the liquidity in Spectra is regularly monitored against the actual requirement, forecast requirement and income. The requirement is relatively constant and the income, whilst fluctuating slightly, is not a significant short-term influencer to the liquidity of the company. The ultimate stress test is to see how long the company could survive, with the capital adequacy intact, with no income whatsoever.

As a MIFID Investment Firm, Spectra is within scope of MIFIDPRU Remuneration Code in the FCA Handbook SYSC 19G. The aim is to ensure Spectra has a risk-focused remuneration policy which is consistent with and promotes effective risk. Spectra is a non-small non-interconnected (“Non-SNI”) Firm and therefore is required to apply additional requirements within its remuneration policies and practices.  SYSC 19G.2.4 explains that a firm’s policies and procedures must be appropriate and proportionate to the nature, scale and complexity of the risks associated with the firm’s business model and activities. The contents of the policy will also depend on the size of the firm, the types of roles within the firm and the business it undertakes set out in SYSC 19.

Spectra’s remuneration policy, is based on the following principles that guide the compensation programs and consequent actions:

• fairness and consistency with the responsibilities assigned and the capabilities demonstrated;
• alignment with the company strategies and with the defined objectives;
• competitiveness regarding practices and market trends;
• enhancement of merit and performance, in terms of results, behaviour and values; and
• clear governance and compliance of regulatory framework.

Spectra’s main policy is to offer competitive remuneration packages to all its employees. Market research (benchmarking) is conducted to enable the practices to be parallel in quality and value with the general conditions present within the market. No individual will be dependent on variable remuneration to an extent that that makes up their majority of their total remuneration.

The remuneration policy and related practices are determined with regards to common interests of partners, employees, and clients. Spectra’s remuneration policy consists of base salaries, as well as performance-based bonuses and benefits.

This policy is designed to attract, retain, and motivate staff at all levels, and is consistent with the objectives outlined in the business strategy through:

• an appropriate balance between variable and fixed component; and
• a proper connection with the remuneration of individual performance and the company.

Fixed remuneration is determined by experience and aptitude for the role and reflects the staff members professional experience and organisational responsibilities as set out in their contract of employment with Spectra. This will be permanent, pre-determined, non-discretionary, non-revocable and not dependent on performance.

Variable remuneration is determined by contribution and performance within the last calendar year. It reflects the long-term performance of the staff member as well as performance against the staff member’s terms of employment

Spectra’s ratio between variable and fixed components of the total remuneration, has been established to ensure that the components are appropriately balanced and that the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration. This allows for the possibility of paying no variable remuneration component, which the firm would do in certain situations, such as where the firm’s profitability performance is particularly constrained, or where there is a risk that the firm may not be able to meet its capital or liquidity regulatory requirements.

The below table summarises the financial and non-financial criteria of performance used across the Firm in assessing the level of variable remuneration to be paid:

	Financial Performance Criteria	Non-Financial Performance Criteria
Firm	Firm-wide performance targets
Business Unit	New business growth	Process efficiencies
	Business maintained	Introduction of new process/products
	Performance targets
Individual	KPIS achieved	Training completed
		No conduct breaches
		No discipline issues

Spectra’s senior management fully acknowledges its responsibilities with respect to this remuneration policy, including its overriding responsibility to ensure that this policy complies with the requirements of the MIFIDPRU Remuneration Code. Senior Management along with Compliance will review this policy on an annual basis, this being sufficiently frequent given the risks faced by the firm.

Spectra considers the current arrangements to be proportionate, given:

• the low-risk nature of the firm’s business;
• the small size of the firm and clear visibility of behaviour and contributions to the organisation that is available to the board; and
• the transparency to the board of the process for determining remuneration and its outcome.

This policy will be reviewed by the Compliance Officer on an annual basis to determine whether it has been implemented correctly and in line with the firm’s business strategy, reflects the risk profile, long-term objectives other relevant goals of the firm and compliance with all relevant legal requirements.

Following this internal review, the results will be documented including findings and remediation actions.

A material risk taker is a staff member at a non-SNI MIFIDPRU investment firm whose professional activities have a material impact on the risk profile of the firm or of the assets that the firm manages.

On an annual basis Spectra will assess all partners and employees to determine whether they are material risk takers. The FCA’s expected roles along with internal assessment of roles and responsibilities will form the decision in determining if an individual is an MRT.

The remuneration MRT register will be updated as often as necessary by the Compliance Officer. This register will document a breakdown of all remuneration an individual classified as an MRT for each performance year has received.

Spectra has identified Individuals will be a MRT if they fall in to one of the below categories:

• Management Body or Senior Management;
• Managerial Responsibility for a material business unit for regulated activities;
• Managerial Responsibility for control functions;
• Managerial Responsibility for prevention of Money Laundering & Terrorist Financing;
• Responsible for managing material risk within the firm;
• Those that are responsible for managing information technology, information security, and/or outsourcing arrangements of critical or important functions

In total Spectra has four MRT’s, three Senior Management individuals and one within another MRT category.

Spectra is relying on the exemption defined under MiFIDPRU 8.6.8R(7) to not disclose the remuneration of its MRTs. This is to prevent the identification of individuals as an MRT.

The purpose of this exemption is to avoid Spectra disclosing information:

1. That would enable a material risk taker to be identified; or
2. That could be associated with a particular material risk taker.

Under MiFIDPRU 8.7 (Investment Policy), a firm must only disclose information on a company whose shares are admitted to trading on a regulated market, where the proportion of voting rights that the MIFIDPRU investment firm directly or indirectly hold in the company is greater than 5% of all voting rights attached to the shares issued by the company, and only in respect of shares in that company to which voting rights are attached.

The Firm does not engage in the trading of shares and therefore has no disclosures in relation to this requirement.