The European Union has introduced a new regime for the prudential requirements of investment firms. From 26 June 2021, the common rules for credit institutions and investment firms were replaced by Directive 2019/2034/EU on the prudential supervision of investment firms (IFD) and Regulation 2019/2033/EU on the prudential requirements of investment firms (IFR) taking into account the special features of capital market institutions.
The new prudential regime classifies investment firms into three categories. Systemically important institutions and those that had requested it because of their group membership and consolidated supervision have remained subject to the CRR, and they must fulfil strict reporting obligations in terms of the assessment of their capital adequacy (Class 1 Minus). Most of the investment firms – 9 out of the 12 supervised by the MNB – are classified into the second category (Class 2), and one supervised entity is categorised as a small-sized and unaffiliated investment firm (Class 3) based on its size, and therefore it must report data at annual frequency.
The MNB has published capital adequacy data under the new framework for the first time for the March 2022 reference period. One large entity accounts for a significant share of the published time series; however, the solvency margin of all of the investment firms is much higher, and in some instances several times higher, than the minimum level required by the regulatory authority.
The published time series is available here: Investment service providers