European Council Agrees to Endorse Commission Proposal for the Investment Firms Regulation and the Investment Firms Directive

Published 7 January 2019

PrintCategory: Investors Regulation

Following a Commission proposal from December 2017, the Council agreed on 7 January 2019 to endorse the Commission’s legislative proposals for the prudential treatment of investment firms, encompassing

  • the Investment Firms Regulation (“IFR”) and
  • the Investment Firms Directive (“IFD”).

IFR and IFD will mainly impact MiFID II type investment firms. Key highlights include:

  • Use of a new set of quantitative factors (“K-Factors”) to classify investment firms as either Class 1, 2 or 3 and tailor regulatory levels to be based on a firm’s classification, thus leading to a more prudential treatment of investment firms.
  • Redrafting the definition of credit institutions to encompass systemic investment firms that undertake “bank like activity”. These very large investment firms will be categorized as Class 1 Firms and will (continue to) be subject to the CCR/CRD IV (and the upcoming CRD V) regime.
  • Non-systemic investment firms will be categorized as Class 2 Firms. Even smaller, non-interconnected firms will be classified as Class 3 Firms. The new IFR and IFD regime will apply to these firms in various degrees, leading certain firms to be (partially) excluded from the CRR/CRD IV regime.

Trilogues regarding the regime are ongoing between the Commission, Council and Parliament. Adoption is expected following plenary hearing.

Click here to read the Council’s press release.

Other updates

28 Apr 2022Taxation / VATUpdates

Higher Corporate Tax Rate for Danish Financial Companies and Deductibility Cap on Salary Expenses

On 6 April 2022, the Danish Government presented a proposal for an amendment of, among others, the Danish Corporation Tax Act.

Danish RegulationManagement Remuneration
26 Apr 2022Impact and ESGUpdates

Final Regulatory Technical Standards for SFDR and Taxonomy Regulation are Published

The RTS will define the new standard for sustainability-related disclosures in the financial services sector in the EU and supplements provisions of the SFDR and of the Taxonomy Regulation.

AIFMDComplianceDisclosure RequirementsSustainability
24 Jan 2022Impact and ESGUpdates

Invest Europe to set ESG Reporting Standards

In November 2021, Invest Europe released its Climate Ambition in which the association committed to contribute to the EU becoming climate-neutral by 2050 and pledged to help the P/E and VC industry move towards net zero. 

AIFMDComplianceDisclosure RequirementsSustainability
6 Jan 2022ELTIFsUpdates

The EU Commission Proposes Amendments to the Regulation of European Long-Term Investment Funds

On 25 November 2021, the European Commission published its proposal to amend the Regulation of European Long-Term Investment Funds (ELTIFs) as part of a new Capital Markets Union (CMU) legislative package.

Retail Investors
20 Dec 2021AIFsUpdates

IPEV Board has Started Review Process for the IPEV Valuation Guidelines

The IPEV Board has started the 2021 review process for the IPEV Valuation Guidelines.

15 Dec 2021AIFsFinancial RegulationImpact and ESGUpdates

The Danish FSA: Significant Room for Improvement for SFDR Disclosures

The Danish FSA has assessed the quality of 4 pension companies and eight credit institutions' website disclosures with regards to information about their policies on the integration of sustainability risks in the investment decision-making process.

AIFMDComplianceDisclosure RequirementsSustainability