EBA and ESMA Issue List of Instruments and Funds Under IFR
EBA and ESMA jointly published a provisional list of additional instruments and funds that competent authorities may allow to be used as own funds for some of the smallest investment firms. These firms include only non-legal persons or joint‐stock companies, or those that meet the conditions for qualifying as small and non‐interconnected investment firms, as defined in the Investment Firms Regulation (also IFR or Regulation 2019/2033). The list is provisional and intended to provide guidance to investment firms and competent authorities ahead of the application of the requirements of the Investment Firms Regulation, as of June 26, 2021.
The provisional list is based on the information received from national competent authorities across EU and includes instruments and funds that national competent authorities may permit to be used as own funds, in addition to the instruments included in the Common Equity Tier 1 (CET1) list published by EBA in accordance with the Capital Requirements Regulation (CRR). Therefore, instruments and funds of investment firms will be allocated either to this new list or to the existing CET1 list, depending on their nature. EBA and ESMA will assess the terms and conditions of all instruments and funds included in this provisional list against regulatory provisions at a later stage and, subsequently, update, maintain, and publish the list on a regular basis.
The first publication of the list relating to further instruments and funds existing before May 31, 2021 has a provisional character because EBA has not yet performed any assessment of the form of instruments and funds included in the list. If this assessment concludes that an instrument or fund does not qualify for treatment under Article 22 of Council Directive 86/635/EEC, such instrument or fund will be removed from the list. Starting with the first update of the list, the inclusion of an instrument or fund in the list implies that EBA has been consulted by competent authorities before they permit further instruments and funds and EBA has assessed the form of instruments and funds included in this list. This list will be updated regularly—for example, each time a new type of further instrument or fund that qualifies as own funds is issued or where a type of further instrument or fund needs to be removed from the list because it no longer qualifies for treatment under Article 22 of Council Directive 86/635/EEC or because it no longer exists.
Related Links
Keywords: Europe, EU, Banking, Securities, IFR, CRR, CET 1, Regulatory Capital, Class 3 Firms, Investment Firms, ESMA, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
SRB Updates MREL Policy and PIA Approach in Resolution PlanningNext Article
BoE and PRA Revise Resolution Policy for BanksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.