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The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published today a discussion paper on the potential review of the investment firms’ prudential framework. The discussion paper aims at gathering early stakeholder feedback to inform the response to the European Commission’s call for advice (CfA). The consultation runs until 30 August 2024. To assess the impact of the possible changes discussed in the paper, the EBA also launched a data collection exercise on a voluntary basis.
The discussion paper touches upon a broad range of topics, including:
It also discusses the implications of the adoption of the new EU Banking package (CRD VI and CRR 3) concerning the trading book, the fundamental review of the trading book (FRTB) and credit valuation adjustments (CVA).
Furthermore, prudential consolidation and a possible extension to crowdfunding and crypto-assets service providers are also considered. In this respect, the discussion paper provides an overview of the interaction of IFD/IFR with requirements applicable to undertakings for collective investment in transferable securities (UCITS) management companies and alternative investment funds managers (AIFMs) providing MiFID services on an ancillary basis or investment firms providing services related to crypto-assets.
The discussion paper also covers aspects related to remuneration in relation to investment firms, AIFMs and UCITS management companies, including the scope of application, remuneration policies, the requirements on variable remuneration, their oversight, disclosure and transparency. Finally, the discussion paper includes a short section on the treatment of firms currently non-prudentially regulated and active in commodity markets.
An ad-hoc data collection addressed to competent authorities, investment firms, and UCITS management companies and AIFMs is launched in parallel to the publication of the discussion paper.