Investment Firms Regulation and Directive

Investment Firms Regulation and Directive

The EU's Investment Firms Regulation and Directive will bring significant changes to the prudential requirements for investment firms. A series of consultations are underway ahead of implementation in June 2021.

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Investment Firms Regulation and Directive

The EU's Investment Firms Regulation (IFR) and Investment Firms Directive (IFD) will put in place a new prudential framework for MiFID-authorised investment firms. Once implemented, a relatively small number of investment firms will be subject to the same prudential requirements that are applied to banks. The remaining investment firms will be subject to a harmonised, and for some an enhanced, set of prudential requirements.

Implementation will require investment firms to identify which classification they will fall into, engage (where applicable) with the Central Bank for re-authorisation or treatment as a credit institution and identify any changes that they need to make to their regulatory capital, liquidity arrangements and remuneration policies.

Investment firms authorised by the Central Bank of Ireland now have until 26 June 2021 to prepare for IFR and IFD implementation.

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