Featured Product

    EC Publishes Regulations Supplementing Investment Firms Directive

    December 07, 2021

    The European Commission (EC) published three Delegated Regulations (2021/2153, 2021/2154, and 2021/2155) to supplement the Investment Firms Directive (IFD or Directive 2019/2034). Regulation 2021/2153 sets out regulatory technical standards specifying the criteria for subjecting certain investment firms to the requirements of Capital Requirements Regulation (CRR). Regulation 2021/2154 sets out regulatory technical standards specifying appropriate criteria to identify categories of staff whose professional activities have a material impact on the risk profile of an investment firm or of the assets that it manages. Regulation 2021/2155 sets out regulatory technical standards 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.

    Regulation 2021/2153 on Prudential Requirements. This Regulation specifies that the activities of an investment firm shall be considered to be carried out on such a scale that the failure or distress of the investment firm could lead to systemic risk where the investment firm exceeds certain thresholds, as specified in Article 1 of the Regulation. The Regulation also highlights that investment firms that are clearing members and that offer clearing services to other financial sector entities, which are not clearing members themselves, shall be considered for the purposes of Article 5(1)(b) of IFD. This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union

    Regulation 2021/2154 on Identification of Material Risk-Takers. This Regulation highlights that staff members shall be deemed to have a material impact on an investment firm’s risk profile or that of the assets it manages where one or more of the qualitative criteria, specified in the Regulation, are met. A staff member shall also be deemed to have a material impact on an investment firm’s risk profile or that of the assets it manages where any one of the quantitative criteria, specified in the Regulation, is met. The Regulation also stipulates that all amounts of the variable and fixed remuneration shall be calculated gross and on a full-time equivalent basis. Investment firms’ remuneration policies shall set out the reference year for the variable remuneration taken into account when calculating the total remuneration. That reference year shall be either the year preceding the financial year in which the variable remuneration is awarded or the year preceding the financial year for which the variable remuneration is awarded. Regulation 2021/2154 shall enter into force on the fifth day following that of its publication in the Official Journal of the European Union.

    Regulation 2021/2155 on Instruments for Variable Remuneration. This Regulation sets out requirements for investment firms for Additional Tier 1, Tier 2, and other instruments used for the purposes of variable remuneration, to ensure that they appropriately reflect the credit quality of the investment firm. The Regulation also sets out provisions related to the write-down, write-up, and conversion mechanisms for different classes of instruments. Finally, the Regulation sets out provisions related to alternative arrangements that may be used by investment firms for the pay-out of variable remuneration under IFD. Regulation 2021/2155 shall enter into force on the fifth day following that of its publication in the Official Journal of the European Union.

     

    Related Links

    Effective Date: December 12, 2021 (Regulations 2021/2154 and 2021/2155)/December 27, 2021 (Regulation 2021/2153)

    Keywords: Europe, EU, Banking, Securities, Investment Firms, Systemic Risk, Remuneration, IFD, IFR, CRR, Basel, Regulatory Capital, EC

    Featured Experts
    Related Articles
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    News

    APRA Licenses Two More Banks, Reduces Committed Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7866