The EU has adopted a new harmonised prudential regime that will apply to all investment firms authorised in the EU from June 2021. The new Investment Firm Regulation and Directive (IFR/IFD) will treat some firms as if they were credit institutions and subject them to the same prudential rules as deposit-taking banks, while imposing entirely new and potentially challenging capital, consolidation, reporting, governance and remuneration requirements on other investment firms. Firms need to act now to prepare for the application of the new regime.
While many investment firms will see a tailored regime as a positive step, the implications of the new regime will differ from firm to firm. Each firm will need to assess what the regime change means for it and take action accordingly. However, some key implications will not be known fully until the supporting delegated acts (DAs), implementing acts (IAs) and technical standards are developed.
IFR/IFD also revises the MiFID II/MiFIR third-country regime for investment services. The revised regime is not as restrictive in terms of market access as it could have been, based on some of the proposals that were put forward during negotiations. However, in the event that third countries are deemed equivalent in future, firms are likely to face additional requirements. The revisions also pave the way for the possibility of partial equivalence, with national regimes continuing to apply for those services/activities where the European Commission has not granted equivalence.
GACO and the GFSC are happy to inform you that we have been able to organise a webinar with a specialist on this field: Caroline Dawson - Partner at Clifford Chance LLP.
Caroline Dawson is a partner in the financial regulation group in Clifford Chance’s London office, specialising in advising financial institutions and other market participants on financial market regulation, mergers and acquisitions in the financial sector and securities and derivatives transactions. She also participates in industry committees and working groups on financial regulatory issues. She joined Clifford Chance in 2006, was seconded to the EMEA equities team at Goldman Sachs in 2009 and was seconded to the Bank of England for PRA matters in 2014.