Investment Firms

The European investment services landscape comprises various types of operators counting more than 6 500 investment firms authorised and regulated by the Markets in Financial Instruments Directive (MiFID) and offering a wide array of services. Investment firms vary greatly in terms of nature and size.

The prudential regulation that governs the exercise of investment services currently stems from the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR). Depending on the services they exercise, and their combination or size, some of the investment firms are exempt from prudential regulation, some are subject to lighter prudential regulations, and others are subject to the full set of CRD and CRR provisions.

Prudential standards aim to minimise the risk of harm to a wide range of stakeholders by helping to ensure that firms manage their business risks responsibly. The purpose of such standards is to strengthen the soundness and stability of investment firms. Furthermore, the prudential regime also aims to avoid the failure of an investment firm, which could result in a material impact on the current or future stability of the financial system. More specifically, for the vast majority of investment firms, prudential requirements also provide means of dealing with investors' asset protection and the impact of a failure.

Technical Standards, Guidelines & Recommendations

  • Regulatory Technical Standards (RTS) on own funds requirements for investment firms

    The purpose of these RTS is to harmonise the calculation of capital requirements for investment firms with limited authorisation to provide investment services, as well as to harmonise the conditions under which competent authorities can make adjustments to such requirements. To this end, the draft RTS also provide a definition of fixed overheads. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in Europe.

    Status: Adopted and published in the Official Journal

Opinions, Reports and other Publications

 

Opinions