Council agrees investment firms prudential standards change

The EU Council has confirmed its position on the compromise proposals on a package of changes to the CRR/CRD4 , comprising a Regulation and a Directive, to allow prudential and supervisory requirements to be proportionate to the risk and business profile of regulated firms while ensuring financial stability. The new measures would divide investment firms into:

  • “bank like” Class 1 firms, that would be treated in the same way as credit institutions. Firms that deal on own account and/or underwrite financial instruments will be automatically subject to CRR/CRD4 if their consolidated assets exceed €15 bn, and may be required by their supervisor to be subject to these standards if their consolidated assets exceed €5 bn;
  • smaller firms, which would have a new bespoke regime.

The Council has also set out greater detail for the equivalence regime for third country firms and gives powers to the Commission as well as to ESMA.



Emma Radmore