Adoption of New Capital and Remuneration Rules for EU Investment Firms

4 November 2019
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Key takeaways:
  • The European Council has adopted the new legislative package revising the prudential framework for EU investment firms, taking the form of the Investment Firm Regulation (the IFR) and the Investment Firm Directive (the IFD).
  • The regime encompasses new regulatory capital, staff remuneration and risk management requirements for all firms authorised under the EU’s Markets in Financial Instruments Directive (MiFID) and is likely to apply in mid-2021.
  • The IFR/IFD package creates a new prudential framework tailored to firms’ business lines and imposes new remuneration rules on investment firms, capturing many firms that are currently not subject to such rules.