Under Articles 60 and 66 of the IFR and IFD, the European Commission is required to deliver a comprehensive report to the EU Council and European Parliament. This report evaluates the prudential framework for investment firms and may propose legislative amendments to address any identified gaps or areas for improvement.

Categorisation of investment firms: Proposed conditions to qualify as small and non-interconnected investment firms as well as the conditions to qualify as credit institutions.

Proportionality and functionality: The framework is deemed fit-for-purpose but requires refinements to enhance proportionality and operational efficiency.

Level playing field: Proposals aim to ensure fair competition among investment firms and between investment firms and financial institutions performing similar activities.

Consistency: Improvements in calculation methodologies and threshold monitoring are suggested to ensure consistent application across the EU.

The report also addresses:

• Adequacy of own funds requirements.
• Implications of the Banking Package.
• Specific considerations on commodity and emissions allowance dealers and on energy firms.
• Prudential consolidation of investment firm groups.
• Remuneration policies.
• Interactions with other regulations, including MiCA, UCITS and AIFM Directives.

Next steps:

The EBA and ESMA will submit their findings to the European Commission for consideration.

For more detailed information, please see here