EBA consultation on the new regulatory framework for investment firms

The European Banking Authority (EBA) has launched a public consultation on its first set of regulatory deliverables on the new regulatory framework for investment firms.  The consultation papers relate to prudential, reporting, disclosures and remuneration requirements.

The first consultation paper on prudential requirements includes three draft Regulatory Technical Standards (RTS) on the reclassification of certain investment firms to credit institutions, five draft RTS on capital requirements for investment firms at solo level, and one draft RTS on the scope and methods of prudential consolidation for investment firms at group level. 

The second consultation paper on reporting requirements and disclosures, includes draft Implementing Technical Standards (ITS) on the levels of capital, concentration risk, liquidity, the level of activities as well as disclosure of own funds; and draft RTS specifying the information that investment firms have to provide in order to enable the monitoring of the thresholds that determine whether an investment firm has to apply for authorisation as credit institution. 

The third and fourth consultation papers on remuneration requirements include one draft RTS on the criteria to identify all categories of staff whose professional activities have a material impact on the firm’s risk profile or assets it manages (‘risk takers’); and one draft RTS 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 of risk takers.  CP on draft RTS on instruments for investment firms.

Comments to these consultations can be submitted through the EBA’s website and must be submitted before 4 September 2020.  The EBA will also hold public hearings on these papers via conference call.  The dates of the public hearings are available on the EBA’s website.