On Friday 29 October, the European Banking Authority (EBA) published its opinion on a new prudential framework specifically adapted to the needs of investment companies, in which it proposes a new classification system for prudential requirements.
As announced in its mid-term review of the action plan on the Capital Markets Union (see EUROPE 11804), the Commission is to present a legislative proposal, in early December, to re-examine the prudential treatment for investment companies - currently governed by the 'MiFID' directive on the financial instruments market (CRR-CRD legislative package). To this end, the institution asked the EBA in June 2016 to issue a technical opinion on the matter.
In its opinion, the EBA recommends establishing a new categorisation system distinguishing between: - systemic investment firms to which the full CRR-CRD requirements should be applied; - other non-systemic investment firms above specific thresholds that should be subject to a more tailored prudential regime based on key factors; - small investment firms providing services limited in number and size to which a very simple regime should be applied.
The opinion also includes a raft of recommendations covering the design and calibration of capital and liquidity requirements, consolidated supervision and reporting requirements. It also examines the appropriateness of the prudential framework for specialised commodity derivative firms. The opinion is available for consultation at: http://bit.ly/2yjPv4k. (Original version in French by Marion Fontana)