EBA published consultations on new regulatory framework for investments firms

June 04, 2020 -The European Banking Authority (EBA) published consultation papers on its first set of regulatory requirements on prudential, reporting, disclosures and remuneration requirements and defined its roadmap for the implementation of the new regulatory framework for investment firms.

The roadmap describes the EBA’s work plan for each of the mandates set in the Investment Firms Regulation and Investment Firms Directive (IFR/IFD). These IFR/IFD mandates will be implemented following a four-phased approach running from 2020 to 2025.

In order to assess the impact of the proposed requirements, the EBA also initiated a data collection exercise on a voluntary basis.

The first consultation paper on prudential requirements includes:

  • draft Regulatory Technical Standards (RTS) on the reclassification of certain investment firms to credit institutions
  • draft RTS on capital requirements for investment firms at solo level
  • draft RTS on the scope and methods of prudential consolidation for investment firms at a group level.

The second consultation paper on reporting requirements and disclosures includes:

  • draft Implementing Technical Standards (ITS) on the levels of capital, concentration risk, liquidity, the level of activities as well as disclosure of own funds;
  • draft RTS specifying the information that investment firms have to report in order to enable the monitoring of the thresholds that determine whether an investment firm has to apply for authorisation as a credit institution.

The third and fourth consultation papers on remuneration requirements include:

  •  draft RTS on the criteria to identify all categories of staff whose professional activities have a material impact on the firm’s risk profile or assets it manages (‘risk takers’);
  • draft RTS specifying the 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 of risk takers.

The consultations will run until 4 September 2020.

For more information please visit EBA website.

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