11 February 2022
The European Banking Authority (EBA) published today an Opinion on the amendments proposed by the European Commission as regards the EBA final draft Regulatory Technical Standards (RTS) specifying the methodology for calculating the fixed overheads requirements for investment firms in the context of the implementation of the Investment Firms Regulation (IFR). Despite having identified a substantive change in the Commission’s version of the RTS, the EBA considers the amendments continue to strike a good balance between the flexibility and risk sensitivity required for the calculation of the fixed overheads requirement and the need for a harmonised regulatory framework.
On 16 December 2020 the EBA submitted its final draft RTS specifying the methodology for calculating the fixed overheads requirements. On 29 November 2021, the European Commission sent a letter to the EBA about its intention to endorse the RTS with amendments and submitted a modified version of the RTS.
The Commission’s version of the RTS, compared to the final draft RTS submitted by the EBA in December 2020, includes a substantive change, which represents an additional point for deduction from total expenses on the list detailed in the draft RTS, and is specifically aimed at market makers. Indeed, the Commission’s proposal enables the investment firms acting as market makers to benefit from the principle of deduction of trading fees also when these are not passed directly to the clients. The EBA agrees with the proposed amendment, while also proposing an editorial change meant to preserve the consistency with the reading of the IFR.
Finally, the EBA agrees with the rest of the Commission’s amendments, which are considered as non-substantive, and, therefore, hopes that a swift adoption can be ensured.
This Opinion is based on Article 10(1) of Regulation (EU) No 1093/2010, which requires the Authority to submit its response in the form of an opinion to amendments proposed by the European Commission.
Franca Rosa Congiu