On 20 December 2017, the European Commission published a proposal for a Regulation on the prudential requirements of investment firms and a proposal for a Directive on the prudential supervision of investment firms. The Capital Requirements Regulation (CRR), which foresees different Commission's reports on prudential rules, is at the origin of this workstream.
Over the past two years, the Commission and the European Banking Authority (EBA), in cooperation with the European Securities and Markets Authority (ESMA), have been looking at such a review of the prudential regime for investment firms.BIPAR has been following this work and, amongst others, provided a response to EBA discussion paper in February 2017, to the Commission’s inception impact assessment in April 2017 and attended various stakeholder meetings organised by the Commission and by EBA. BIPAR also responded to the “Better Regulation” consultation that immediately followed the publication of the Commission's proposals.
The Commission explains that under the new legislative proposals, the vast majority of investment firms in the EU would no longer be subject to rules that were originally designed for banks.With the new proposals, the Commission reduces the number of categories of investment firms with regard to the prudential regime applicable from 11 to 3:
BIPAR is in favour of proportionate rules. Some of BIPAR’s key issues with the Commission's proposals are:
The proposals are currently under discussion for amendment and adoption by the European Parliament and the Council of the EU. BIPAR and its dedicated working party have had various contacts with the Council Presidency, the Parliament and with the officials of the European Commission.