EBA publishes the methodology for investment firms to be reclassified as credit institutions 

  • Press Release
  • 20 December 2021
  • The EBA sets out guidance on the application of thresholds to determine which investment firms are to be re-classified as credit institutions. 

  • The methodological framework is provided through two draft regulatory technical standards (RTS) The first RTS provide details regarding the calculation of the EUR 30 bn threshold for the classification purposes; the second RTS provide the necessary information to supervisors to enable the monitoring of the thresholds. 

The European Banking Authority (EBA) published today a package of two final draft regulatory technical standards (RTS) regarding the reclassification of investment firms as credit institutions. These final draft RTS, which are part of the EBA’s roadmap for the implementation of a new prudential regime for investment firms, will provide clarity in the calculation of the EUR 30 bn threshold for investment firms looking to understand whether they should be applying for authorisation as a credit institution, as well as assist competent authorities in the monitoring of firms’ position triggering a reclassification. 

The identification of large investment firms, which will be reclassified as credit institutions and, therefore, subject to the application of the Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD), depends on the size of the investment firms and of the groups they belong to. With today’s publication, the EBA is providing a methodological framework for determining the need for reclassification of an investment firm as a credit institution, which is neutral to geographical limitations, thus ensuring a proportionate and consistent calculation of the level of total assets to be compared to the EUR 30 bn threshold.  

The final draft RTS on the calculation methodology also cover other technical aspects, including the accounting standards for the determination of asset values, the methodology for implementing the solo and the group test, as well as the procedure to calculate the total assets on a monthly basis and the treatment of assets belonging to European branches of third-country groups. 

Finally, under the Investment Firms Regulation (IFR), investment firms are required to provide information to enable the monitoring of the threshold for reclassification. The second set of draft RTS submitted today to the Commission specify harmonised reporting requirements to provide competent authorities with the tools for carrying out the ongoing monitoring of the EUR 30 bn threshold. These harmonised requirements are an integral part of the investment firms’ reporting framework. 

Legal basis and background 

The EBA has developed these draft RTS according to Article 8a(6)(b) of the CRD and Article 55(5) of the IFR which mandates the Authority to further specify, develop and determine a prudential framework for investment firms to ensure a level playing field among investment firms across the EU and supervisory convergence. 

The Investment Firms prudential package consists of the Directive (EU) 2019/2034 and the Regulation (EU) 2019/2033, which were published in the Official Journal on 5 December 2019 and establish a new prudential framework for investment firms authorised under MIFID. 


Final draft RTS on reclassification of investment firms as credit institutions

(579.56 KB - PDF) Last update 20 December 2021

Final draft RTS on provision of information for the effective monitoring of credit institution thresholds

(389.05 KB - PDF) Last update 20 December 2021

RTS on threshold monitoring - Annex 1 - Templates

(22.09 KB - Excel Spreadsheet) Last update 20 December 2021

RTS on threshold monitoring - Annex 2 - Instructions

(240.21 KB - PDF) Last update 20 December 2021

RTS on threshold monitoring - Annex 3 - Validation rules and DPM

(103.54 KB - PDF) Last update 20 December 2021

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Franca Rosa Congiu