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01 February 2021 / article

Quoted - IFR and IFD: the new prudential regime for investment firms

On 26 June 2021 a new prudential regime for investment firms will enter into force. This new regime will also have consequences for managers of investment funds with a MiFID top-up, who are authorized to provide investment services.

The new regime consists of a regulation (the Investment Firm Regulation) and a directive (the Investment Firm Directive). In this Quoted the most relevant changes for investment firms under this new regime will be discussed, including capital requirements, restriction of concentration risks, liquidity requirements, reporting and disclosure requirements and the remuneration policy of investment firms. Furthermore, this Quoted discusses the ESG-report, which is obliged as per December 26, 2022 for category 2 investment firms.

This Quoted discusses the following practical recommendations for investment firms (and managers of investment funds with a MIFID top-up):

  1. Determine whether your organisation falls within the scope of the new regime, namely by qualification as a Category 2 or 3 investment firm or as manager with a MiFID top-up.
  2. Identify which obligations apply to you and what you need to change in your procedures compared to the current CRR/CRD IV regime.
  3. Establish a procedure to continue to determine whether your firms qualify as a Category 2 or 3 investment firm, given the applicable thresholds.
  4. Establish a procedure or modify the existing procedure to meet the requirements under the new prudential regime, such as the minimum capital requirement (including the K-factor requirement), the concentration risk, and the reporting and disclosure requirements.

For questions or advice regarding this topic, please contact your trusted advisor.

Click here to download the pdf-version about 'IFR and IFD: the new prudential regime for investment firms' or read it below.


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