Adopted and published on the Official Journal
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.
The European Banking Authority (EBA) launches today a consultation on draft Regulatory Technical Standards (RTS) on own funds requirements for investment firms based on fixed overheads. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in Europe. The consultation runs until 30 September 2013.
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.
For the calculation of the fixed overheads, these draft RTS propose the so-called ‘subtractive' approach whereby variable cost items are deducted from the total expenses as calculated according to the applicable accounting framework. They propose to also include the use of tied agents, since a tied agent exposes an investment firm to the same risk it is exposed to when it carries out business on its own.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 30 September 2013.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 5 September 2013 from 13:00 to 15:00 hours UK time.
The proposed draft RTS have been developed on the basis of Regulation (EU) 575/2013 (Capital Requirements Regulation – CRR) in consultation with the European Securities and Markets Authority (ESMA). ESMA will be consulted again before the finalisation of these draft RTS so as to ensure a consistent framework for investment firms. The EBA is expected to submit these draft RTS to the European Commission for endorsement by 1 March 2014.
The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) on own funds requirements for investment firms based on fixed overheads. These RTS harmonise the calculation of capital requirements for those investment firms that have limited authorisation to provide investment services, as well as the conditions under which competent authorities can make adjustments to such requirements. These final draft RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in Europe.
For the calculation of the fixed overheads, these final draft RTS use the so-called ‘subtractive' approach whereby variable cost items are deducted from the total expenses as calculated according to the applicable accounting framework. They also introduce a special treatment of tied agents, since a tied agent exposes an investment firm to the same risk it is exposed to when it carries out business on its own.
These final draft RTS also introduce thresholds above which competent authorities can make adjustments to the capital requirements as well as minimum thresholds below which firms are exempted from the adjustments in capital requirements. This would help them avoid too burdensome requirements, especially if they are in a start-up phase.
The EBA finalised these draft RTS taking into account the responses to the consultation that ended on 30 September 2013.
The proposed final draft RTS have been developed on the basis of Regulation (EU) 575/2013 (Capital Requirements Regulation – CRR) and in consultation with the European Securities and Markets Authority (ESMA), so as to ensure a consistent framework for investment firms.
The final draft standards have been sent today to the European Commission for their adoption as EU Regulations that will be directly applicable throughout the EU.
The European Banking Authority (EBA) launches today a consultation on draft Regulatory Technical Standards (RTS) on own funds requirements for investment firms based on fixed overheads. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in Europe. The consultation runs until 30 September 2013.
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.
For the calculation of the fixed overheads, these draft RTS propose the so-called ‘subtractive’ approach whereby variable cost items are deducted from the total expenses as calculated according to the applicable accounting framework. They propose to also include the use of tied agents, since a tied agent exposes an investment firm to the same risk it is exposed to when it carries out business on its own.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 30 September 2013.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 5 September 2013 from 13:00 to 15:00 hours UK time.
The proposed draft RTS have been developed on the basis of Regulation (EU) 575/2013 (Capital Requirements Regulation – CRR) in consultation with the European Securities and Markets Authority (ESMA). ESMA will be consulted again before the finalisation of these draft RTS so as to ensure a consistent framework for investment firms. The EBA is expected to submit these draft RTS to the European Commission for endorsement by 1 March 2014.