April 11, 2018

EC issued a draft report on the proposal for a regulation on the prudential requirements of investment firms and amending Capital Requirements Regulation or CRR (No 575/2013), Markets in Financial Instruments Regulation or MiFIR (No 600/2014), and Regulation No 1093/2010.

The Explanatory Statement included in the draft report highlights that the Investments Firms Package—composed of one proposal for a Directive on prudential supervision of investment firms and one proposal for a Regulation on prudential requirements of investment firms—was designed with the assumption that this prudential regime is more designed for risk of credit institutions and does not take sufficiently into account the different business profiles and risks of investment firms. Therefore, the proposals aim to differentiate the prudential regime according to the size, nature, and complexity of investment firms:

  • The largest and most systemic investment firms would remain under the prudential and supervisory regime of banks as set out in the CRR/CRD. This would be achieved by treating these large and systemic investment firms as credit institutions.
  • All other investment firms in the EU would no longer be subject to CRR/CRD rules, but would enjoy a new bespoke regime with dedicated prudential and supervisory requirements.

 

Related Link: Draft Report (PDF)

Keywords: Europe, EU, Banking, Securities, CRR, CRD, MiFIR, CRR Review, Proportionality, Investment Firms, EC