Council of the European Union and European Parliament 27 November 2019, Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (Text with EEA relevance)

Also known as

Regulation (EU) 2019/2033 establishes a bespoke prudential framework for investment firms authorised under Directive 2014/65/EU, replacing the prior application of the credit-institution-oriented Regulation (EU) No 575/2013 for non-systemic investment firms, while retaining that framework for systemic firms whose consolidated assets meet or exceed EUR 30 billion and which are reclassified as credit institutions. The Regulation introduces a tiered own funds requirement structure based on the highest of a fixed overheads requirement, a permanent minimum capital requirement, or a K-factor requirement capturing Risk-to-Client, Risk-to-Market, and Risk-to-Firm metrics, with simplified obligations for small and non-interconnected investment firms meeting specified quantitative thresholds. The Regulation also imposes concentration risk limits, liquidity requirements, regulatory reporting, and public disclosure obligations, and amends Regulations (EU) No 1093/2010, No 575/2013, No 600/2014, and No 806/2014 to ensure coherence with the revised prudential architecture, with general application from 26 June 2021.AI