A new EU prudential and remuneration regime for investment firms
Investment Firms Regulation (IFR) was published in the Official Journal on 5 December 2019.
- Corrigendum to IFR was published in the Official Journal on 24 January 2020 (Draft RTS/ITS relating to the amended MiFIR third-country equivalence regime are now due in September 2020, rather than 2021).
Investment Firms Directive (IFD) was published in the Official Journal on 5 December 2019.
The EBA has published a Roadmap for EBA mandates arising from IFR/IFD, which splits EBA publications into 4 phases (due between December 2020 and June 2025).
There are no draft or final Level 2 measures yet but the EBA published the following consultation papers (constituting Phase 1 of the EBA mandates) on 4 June 2020 (open until 4 September 2020). The final drafts are expected in December 2020.
- Draft RTS on the information to be provided for the authorisation of investment firms as credit institutions (Article 8a(6) point a) of the CRD)
- Draft RTS on the calculation of the threshold referred to in Article 4(1)(1b) CRR (Article 8a(6) point b) of the CRD)
- Draft RTS to specify the calculation of the fixed overheads requirement and to define the notion of a material change (Article 13 (4) of the IFR)
- Draft RTS to specify the methods for measuring the K-factors (Article 15(5), point a) of the IFR)
- Draft RTS on the definition of segregated account (Article 15 (5) point b) of the IFR)
- Draft RTS to specify adjustments to the K-DTF coefficients (Article 15(5) point c) of the IFR)
- Draft RTS to specify the calculation of the amount of the total margin for the calculation of K-CMG (Article 23(3) of the IFR)
- Draft RTS on the criteria for subjecting certain investment firms to the CRR (Article 5 (6) of the IFD)
- Draft RTS on prudential consolidation of investment firms groups (Article 7(5) of the IFR)
EBA/CP/2020/07 on supervisory reporting and disclosures for investment firms and Annexes (containing the draft RTS/ITS) covering:
- Draft ITS on reporting requirements for investment firms under Article 54(3) and on disclosures requirements under Article 49(2) of IFR
- Draft RTS on the monitoring of information related to the thresholds for credit institutions reporting requirements for investment firms under Article 55(5) of IFR
- Draft RTS on classes of instruments that adequately reflect the credit quality of the investment firm as a going concern and possible alternative arrangements that are appropriate to be used for the purposes of variable remuneration (Art 32(8) IFD)
- RTS on criteria to identify categories of staff whose professional activities have a material impact on an investment firm's risk profile or assets it manages under Directive (IFD) 2019/2034 of the European Parliament and of the Council on the prudential supervision of investment firms (Art 30(4) IFD)
EBA report (December 2015) highlighting weaknesses in existing prudential framework for investment firms.
First EBA opinion (October 2016) containing advice on analysis relating the class 1 firms.
EBA discussion paper (November 2016) on new prudential framework (including K-factors) for class 2 and 3 investment firms.
Second EBA opinion (September 2017) containing advice on the prudential requirements for class 2 and 3 investment firms.
UK prudential regime for investment firms
HM Treasury policy statement (23 June 2020) on implementation of the EU prudential regimes (for credit institutions and investment firms).
FCA DP20/2 on the UK prudential regime for investment firms.