The Financial Services Authority (FSA) will publish a consultation paper tomorrow to set higher capital requirements on riskier financial services firms ready for the EU Directive in 2004.
The move will mean all financial services companies, including general insurers and brokers, will have to show they have a minimum capital ratio to cover all risks.
The FSA believes this will improve the "soundness" of risky firms which will have to hold more capital than the "less risky firms".
