EBA delivering the 1st phase of its roadmap for investment firms

The deadline for the investment firms directive (IFD) and investment firms regulation (IFR) is approaching and the European Banking Authority has delivered the first phase of its roadmap for the investment firms by publishing 3 reports on this subject.

Final RTS on prudential requirements for investment firms:

The European Banking Authority (EBA) published seven final draft Regulatory Technical Standards (RTS) on the prudential treatment of investment firms. These final draft RTS are part of the phase 1 mandates roadmap for investment firms and are there to ensure that the new prudential framework for investment firms is well implemented while taking into account the complexity of those firms. EBA is preparing everything for a smooth adoption of the Investment Firms Regulation (IFR) and Directive (IFD) by mid-2021.

Consultation paper on the remuneration policies for investment firms

EBA published a consultation paper on the guidelines for remuneration policies and provisions that Class 2 investment firms need to comply with under the new Investment Firms Directive (IFD), all while taking into account the proportionality principle. Although the remuneration framework for investment firms resembles the one for credit institutions, there are some differences. The remuneration policies help to ensure an alignement of the variable remuneration of the identified staff with the risk profile of the IF and assets it manages. It goes without saying that the remuneration policies also must be gender neutral.

Consultation paper on the guidelines for internal governance in investment firms

The 3rd paper published by EBA is a consultation paper about the guidelines for internal governance within investment firms under the IFD. The paper defines which governance provisions Class 2 investment firms need to comply with, since this governance framework’s goal is to ensure that investment firms have a clear and organisation structure. It goes into detail about the tasks and responsibilities of the management and the organisation of the firms, and shows how investment firms can manage their risks and adopt adequate internal control mechanisms. Those provisions are created to help investment firms to adopt transparent structures and allow the supervision of all their activities.

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