Investment firms

Investment firms authorised under the Markets in Financial Instruments Directive (MiFID) provide a range of services and activities to investors in financial markets. These services are essential for the functioning of the financial markets and include, among others, the reception and transmission of orders, the provision of investment advice, discretionary portfolio management and trading on own account.

The population of investment firms across the EU is diverse and firms vary greatly in terms of size, business model, risk profile, complexity and interconnectedness, ranging from one-person companies to large internationally active groups.

Taken into account their diversity, as well as their specific risk profiles not always properly captured by the banking prudential framework, the European Commission developed a new prudential framework, consisting of the Directive (EU) 2019/2034 (IFD) and the Regulation (EU) 2019/2033 (IFR).

The new framework aims at creating an appropriate and proportional framework for investment firms, while maintaining systemic investment firms under the prudential requirements and supervision of the Capital Requirements Regulation and Capital Requirements Directive (CRR/CRD). This new framework aims at ensuring the safe functioning of investment firms, strengthening their soundness and stability and better managing their risks towards customers, market and the firms themselves.

Under the investment firms’ prudential framework, a significant number of mandates have been given to the EBA to deliver regulatory products on the following areas: thresholds and criteria for investment firms to be subject to the CRR, capital requirements and capital composition, the supervisory review process, supervisory reporting, disclosure requirements, variable remuneration, governance, mandates related to economic, social and governance (ESG) risks and supervisory convergence.

The EBA’s complete work plan for delivering on those regulatory products is outlined in the IFD-IFR Roadmap.

Technical Standards, Guidelines & Recommendations

Technical standards

Opinions, Reports and other Publications