EU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms. The published Directive and the Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Regulation 2019/2033 shall apply from June 26, 2021, with certain exceptions.
Directive 2019/2034 lays down rules on the initial capital of investment firms and on the supervisory powers and tools for prudential supervision of investment firms by competent authorities. The Directive covers rules for the prudential supervision of investment firms by competent authorities in a manner that is consistent with the rules set out in Regulation 2019/2033. It specifies publication requirements for competent authorities in the field of prudential regulation and supervision of investment firms. Directive (EU) 2019/2034 on the prudential supervision of investment firms amends Capital Requirements Directives (CRD IV or Directive 2013/36/EU), Bank Recovery & Resolution Directive (BRRD or Directive 2014/59/EU), Markets in Financial Instruments Directive (MiFID II or Directive 2014/65/EU), Financial Conglomerates Directive (2002/87/EC), Undertakings for Collective Investment in Transferable Securities Directive (UCITS or Directive 2009/65/EC), and Alternative Investment Fund Managers Directive (AIFMD or Directive 2011/61/EU).
Regulation 2019/2033 on the prudential requirements of investment firms amends the Capital Requirements Regulation (CRR or Regulation 575/2013), Markets in Financial Instruments Regulation (MiFIR or Regulation 600/2014), Single Resolution Mechanism Regulation (SRMR or Regulation 806/2014), and Regulation 1093/2010. This regulation lays down uniform prudential requirements that apply to investment firms authorized and supervised under MiFID II and supervised for compliance with prudential requirements under Directive (EU) 2019/2034. The prudential requirements include the following:
- Own funds requirements relating to quantifiable, uniform, and standardized elements of risk‐to‐firm, risk‐to‐client, and risk‐to‐market
- Requirements limiting concentration risk
- Liquidity requirements relating to quantifiable, uniform, and standardized elements of liquidity risk
- Reporting requirements related to above mentioned points
- Public disclosure requirements
Effective Date: December 25, 2019
Keywords: Europe, EU, Banking, Securities, Investment Firms, Regulation 2019/2033, Directive 2019/2034, Reporting, Proportionality, Disclosures, Regulatory Capital, CRR/CRD
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.