European Council Agrees to Endorse Commission Proposal for the Investment Firms Regulation and the Investment Firms Directive
Published 7 January 2019
Category: 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.
Recently, the EU Commission presented a plan for a Net-Zero Industry Act and a European Sovereignty Fund as part of a bigger Green Deal Industrial Plan. The initiatives shall be seen in connection with the European Green Deal and the goal of making EU climate neutral by 2050.Cross-BorderGovernanceSustainability
On 1 January 2023 new rules have imposed stricter requirements for targets and policies on the gender composition of managements. These rules cover both large Danish companies (covered by accounting class C), including state-owned and some listed companies (covered by accounting class D), as well as certain companies within the financial areaComplianceDanish RegulationSustainability
The European Commission expert group; Platform on Sustainable Finance, has published a final report on the minimum safeguards laid out in Article 3 and 18 of the Taxonomy Regulation. It replaces the draft report published in July 2022.ComplianceSustainability
The CSRD has now been finally adopted after the Council of the European Union on 28 November 2022 approved the European Parliament’s position. On 16 December 2022, the directive was published in the Official Journal. The date of entry into force is 20 days from the publication date.ComplianceSustainability
Lately, EU has sharpened its focus on preventing greenwashing as well as strengthening the sustainability reporting requirements. One step, among others, is the recent passing of the CSRD. Another is a proposal published in March 2022 by the European Commission with amendments for the Directive 2005/29/EC on Unfair Commercial Practices (UCPD) as well as the Directive 2011/83/EU on Consumer Rights.Cross-BorderDanish RegulationSustainability
Amendments to the Danish Corporation Tax Act and the Danish Tax Assessment Act have entered into force
Following the amendments, enacted on 9 June 2022, the corporate tax rate applicable to financial companies has increased from 22 percent to 25.2 percent as per 1 January 2023 and will increase to 26 percent in 2024.Danish RegulationManagement Remuneration