EBA published a package that includes the final draft implementing technical standards on supervisory reporting and disclosures of investment firms. The disclosure requirements will be applicable from June 26, 2021 while the first reporting reference date is September 2021 for quarterly reports and December 2021 for annual reports. These reporting requirements are a part of the EBA reporting framework 3.1, which is expected to apply from September 2021. EBA will also develop the data point model, XBRL taxonomy, and validation rules based on the final draft implementing technical standards.
The standards included in this package set out the main aspects of the new reporting framework in relation to the calculation of own funds, levels of minimum capital, concentration risk, liquidity requirements, and the level of activity in respect of small and non-interconnected investment firms. The implementing technical standards propose a different set of templates to cover small and non-interconnected investment firms and to include information that is proportionate to their size and complexity. The accompanying annexes contain reporting templates and instructions for Class 2 and Class 3 investment firms, information about data point model and validation rules, templates and instructions for disclosure of own funds, and reporting templates and instructions for group capital test. Additionally, one template has been included to define the size and level of activity thresholds that will trigger a shift to the reporting requirements into one or the other classification of investment firms (class 2 and class 3). EBA issued a single set of standards with integrated Pillar 3 disclosures and supervisory reporting requirements and standardized formats and definitions with a view to improving consistency between reporting and disclosures requirements, which will facilitate compliance with both requirements.
The draft implementing technical standards will be submitted to EC for endorsement before being published in the Official Journal of the European Union. The final draft implementing technical standards, which are part of the phase 1 mandates of the EBA roadmap on investment firms, will ensure a proportionate implementation of the new prudential framework for investment firms taking into account the different activities, sizes, and complexity of investments firms. The Investment Firms Prudential Package consists of the Investment Firms Directive (2019/2034 or IFD) and the Regulation (2019/2033 or IFR), which were published in the Official Journal of the European Union on December 05, 2019, entered into force on December 26, 2019, and establish a new prudential framework for investment firms authorized under Markets in Financial Instruments Directive (MiFID). The IFR and IFD package covers small and non-interconnected investment firms (class 3 firms) and other investment firms other than small and non-interconnected investment firms (class 2 firms). IFR requires the development of several pieces of level 2 legislation in to reflect and implement the new requirements for investment firms.
Keywords: Europe, EU, Banking, Securities, IFR, IFD, Implementing Technical Standards, Reporting, Disclosures, Investment Firms, EBA
Previous ArticleMNB Revises Principles for Setting MREL for Banks
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.