What changed, Regulation (EU) 2019/2033

+ ### Article 1 — Subject matter and scope
− ### art_1
+ **1.** This Regulation lays down uniform prudential requirements which apply to investment firms authorised and supervised under Directive 2014/65/EU and supervised for compliance with prudential requirements under Directive (EU) 2019/2034 in relation to the following:(a) own funds requirements rela…
− Article 1
− 
− 1. This Regulation lays down uniform prudential requirements which apply to investment firms authorised and supervised under Directive 2014/65/EU and supervised for compliance with prudential requirements under Directive (EU) 2019/2034 in relation to the following:
+ **2.** By way of derogation from paragraph 1, an investment firm authorised and supervised under Directive 2014/65/EU, which carries out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU, shall apply the requirements of Regulation (EU) No 575/201…
− | (a) | own funds requirements relating to quantifiable, uniform and standardised elements of risk‐to‐firm, risk‐to‐client and risk‐to‐market; |
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− | (b) | requirements limiting concentration risk; |
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− | (c) | liquidity requirements relating to quantifiable, uniform and standardised elements of liquidity risk; |
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− | (d) | reporting requirements related to points (a), (b) and (c); |
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− | (e) | public disclosure requirements. |
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− 2. By way of derogation from paragraph 1, an investment firm authorised and supervised under Directive 2014/65/EU, which carries out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU, shall apply the requirements of Regulation (EU) No 575/2013 wh…
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− | (a) | the total value of the consolidated assets of the investment firm is equal to or exceeds EUR 15 billion, calculated as an average of the previous 12 months excluding the value of the individual assets of any subsidiaries established outside the Union that carry out any of the activities refe…
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− | (b) | the total value of the consolidated assets of the investment firm is less than EUR 15 billion, and the investment firm is part of a group in which the total value of the consolidated assets of all undertakings in the group that individually have total assets of less than EUR 15 billion and t…
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− | (c) | the investment firm is subject to a decision by the competent authority in accordance with Article 5 of Directive (EU) 2019/2034. |
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+ **3.** The derogation provided for in paragraph 2 does not apply where an investment firm no longer meets any of the thresholds set out in that paragraph, calculated over a period of 12 consecutive months, or where a competent authority so decides in accordance with Article 5 of Directive (EU) 2019/…
− 3. The derogation provided for in paragraph 2 does not apply where an investment firm no longer meets any of the thresholds set out in that paragraph, calculated over a period of 12 consecutive months, or where a competent authority so decides in accordance with Article 5 of Directive (EU) 2019/2034…
+ **4.** Investment firms that meet the conditions set out in paragraph 2 shall remain subject to the requirements of Articles 55 and 59.
− 4. Investment firms that meet the conditions set out in paragraph 2 shall remain subject to the requirements of Articles 55 and 59.
+ **5.** By way of derogation from paragraph 1, competent authorities may allow an investment firm authorised and supervised under Directive 2014/65/EU that carries out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU to apply the requirements of …
− 5. By way of derogation from paragraph 1, competent authorities may allow an investment firm authorised and supervised under Directive 2014/65/EU that carries out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU to apply the requirements of Regu…
− 
− | (a) | the investment firm is a subsidiary and is included in the supervision on a consolidated basis of a credit institution, a financial holding company or a mixed financial holding company, in accordance with the provisions of Chapter 2 of Title II of Part One of Regulation (EU) No 575/2013; |
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− | (b) | the investment firm notifies the competent authority under this Regulation and the consolidating supervisor, if applicable; |
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− | (c) | the competent authority is satisfied that the application of the own funds requirements of Regulation (EU) No 575/2013 on an individual basis to the investment firm and on a consolidated basis to the group, as applicable, is prudentially sound, does not result in a reduction of the own funds…
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+ ### Article 2 — Supervisory powers
− ### art_2
− Article 2
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+ ### Article 3 — Application of stricter requirements by investment firms
− ### art_3
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− Article 3
+ ### Article 4 — Definitions
− ### art_4
+ **1.** For the purposes of this Regulation, the following definitions apply:(1) ‘ancillary services undertaking’ means an undertaking, the principal activity of which consists of owning or managing property, managing data‐processing services, or a similar activity which is ancillary to the principal…
− Article 4
− 
− 1. For the purposes of this Regulation, the following definitions apply:
+ **2.** The Commission is empowered to adopt delegated acts in accordance with Article 56 to supplement this Regulation by clarifying the definitions set out in paragraph 1 to:(a) ensure uniform application of this Regulation;(b) take account, in the application of this Regulation, of developments on…
− | (1) | ‘ancillary services undertaking’ means an undertaking, the principal activity of which consists of owning or managing property, managing data‐processing services, or a similar activity which is ancillary to the principal activity of one or more investment firms; |
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− | (2) | ‘asset management company’ means an asset management company as defined in point (19) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (3) | ‘clearing member’ means an undertaking established in a Member State which fulfils the definition in point (14) of Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council (17); |
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− | (4) | ‘client’ means a client as defined in point (9) of Article 4(1) of Directive 2014/65/EU except that, for the purposes of Part Four of this Regulation, ‘client’ means any counterparty of the investment firm; |
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− | (5) | ‘commodity and emission allowance dealer’ means a commodity and emission allowance dealer as defined in point (150) of Article 4(1) of Regulation (EU) No 575/2013; |
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+ ### Article 5 — General principle
− | (6) | ‘commodity derivatives’ means commodity derivatives as defined in point (30) of Article 2(1) of Regulation (EU) No 600/2014; |
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− | (7) | ‘competent authority’ means a competent authority as defined in point (5) of Article 3(1) of Directive (EU) 2019/2034; |
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− | (8) | ‘credit institution’ means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (9) | ‘dealing on own account’ means dealing on own account as defined in point (6) of Article 4(1) of Directive 2014/65/EU; |
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− | (10) | ‘derivatives’ means derivatives as defined in point (29) of Article 2(1) of Regulation (EU) No 600/2014; |
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− | (11) | ‘consolidated situation’ means the situation that results from applying the requirements of this Regulation in accordance with Article 7 to a Union parent investment firm, Union parent investment holding company or Union parent mixed financial holding company as if that undertaking formed, …
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− | (12) | ‘consolidated basis’ means on the basis of the consolidated situation; |
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− | (13) | ‘execution of orders on behalf of clients’ means execution of orders on behalf of clients as defined in point (5) of Article 4(1) of Directive 2014/65/EU; |
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− | (14) | ‘financial institution’ means an undertaking other than a credit institution or investment firm, and other than a pure industrial holding company, the principal activity of which is to acquire holdings or to pursue one or more of the activities listed in points (2) to (12) and point (15) of…
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− | (15) | ‘financial instrument’ means a financial instrument as defined in point (15) of Article 4(1) of Directive 2014/65/EU; |
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− | (16) | ‘financial holding company’ means a financial holding company as defined in point (20) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (17) | ‘financial sector entity’ means a financial sector entity as defined in point (27) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (18) | ‘initial capital’ means initial capital as defined in point (18) of Article 3(1) of Directive (EU) 2019/2034; |
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− | (19) | ‘group of connected clients’ means a group of connected clients as defined in point (39) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (20) | ‘investment advice’ means investment advice as defined in point (4) of Article 4(1) of Directive 2014/65/EU; |
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− | (21) | ‘investment advice of an ongoing nature’ means the recurring provision of investment advice as well as the continuous or periodic assessment and monitoring or review of a client portfolio of financial instruments, including of the investments undertaken by the client on the basis of a contr…
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− | (22) | ‘investment firm’ means an investment firm as defined in point (1) of Article 4(1) of Directive 2014/65/EU; |
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− | (23) | ‘investment holding company’ means a financial institution, the subsidiaries of which are exclusively or mainly investment firms or financial institutions, at least one of such subsidiaries being an investment firm, and which is not a financial holding company as defined in point (20) of Ar…
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− | (24) | ‘investment services and activities’ means investment services and activities as defined in point (2) of Article 4(1) of Directive 2014/65/EU; |
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− | (25) | ‘investment firm group’ means a group of undertakings which consists of a parent undertaking and its subsidiaries or of undertakings which meet the conditions set out in Article 22 of Directive 2013/34/EU of the European Parliament and of the Council (20), of which at least one is an invest…
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− | (26) | ‘K‐factors’ means own funds requirements set out in Title II of Part Three for risks that an investment firm poses to clients, markets and to itself; |
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− | (27) | ‘assets under management’ or ‘AUM’ means the value of assets that an investment firm manages for its clients under both discretionary portfolio management and nondiscretionary arrangements constituting investment advice of an ongoing nature; |
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− | (28) | ‘client money held’ or ‘CMH’ means the amount of client money that an investment firm holds, taking into account the legal arrangements in relation to asset segregation and irrespective of the national accounting regime applicable to client money held by the investment firm; |
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− | (29) | ‘assets safeguarded and administered’ or ‘ASA’ means the value of assets that an investment firm safeguards and administers for clients, irrespective of whether assets appear on the investment firm’s own balance sheet or are in third‐party accounts; |
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− | (30) | ‘client orders handled’ or ‘COH’ means the value of orders that an investment firm handles for clients, through the reception and transmission of client orders and through the execution of orders on behalf of clients; |
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− | (31) | ‘concentration risk’ or ‘CON’ means the exposures in the trading book of an investment firm to a client or a group of connected clients the value of which exceeds the limits in Article 37(1); |
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− | (32) | ‘clearing margin given’ or ‘CMG’ means the amount of total margin required by a clearing member or qualifying central counterparty, where the execution and settlement of transactions of an investment firm dealing on own account take place under the responsibility of a clearing member or qua…
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− | (33) | ‘daily trading flow’ or ‘DTF’ means the daily value of transactions that an investment firm enters through dealing on own account or the execution of orders on behalf of clients in its own name, excluding the value of orders that an investment firm handles for clients through the reception …
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− | (34) | ‘net position risk’ or ‘NPR’ means the value of transactions recorded in the trading book of an investment firm; |
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− | (35) | ‘trading counterparty default’ or ‘TCD’ means the exposures in the trading book of an investment firm in instruments and transactions referred to in Article 25 giving rise to the risk of trading counterparty default; |
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− | (36) | ‘current market value’ or ‘CMV’ means the net market value of the portfolio of transactions or securities legs subject to netting in accordance with Article 31, where both positive and negative market values are used in computing CMV; |
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− | (37) | ‘long settlement transactions’ means long settlement transactions as defined in point (2) of Article 272 of Regulation (EU) No 575/2013; |
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− | (38) | ‘margin lending transaction’ means margin lending transactions as defined in point (10) of Article 3 of Regulation (EU) 2015/2365 of the European Parliament and of the Council (21); |
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− | (39) | ‘management body’ means a management body as defined in point (36) of Article 4(1) of Directive 2014/65/EU; |
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− | (40) | ‘mixed financial holding company’ means a mixed financial holding company as defined in point (15) of Article 2 of Directive 2002/87/EC of the European Parliament and of the Council (22); |
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− | (41) | ‘off‐balance‐sheet item’ means any of the items referred to in Annex I to Regulation (EU) No 575/2013; |
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− | (42) | ‘parent undertaking’ means a parent undertaking within the meaning of point (9) of Article 2 and Article 22 of Directive 2013/34/EU; |
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− | (43) | ‘participation’ means participation as defined in point (35) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (44) | ‘profit’ means profit as defined in point (121) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (45) | ‘qualifying central counterparty’ or ‘QCCP’ means a qualifying central counterparty as defined in point (88) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (46) | ‘portfolio management’ means portfolio management as defined in point (8) of Article 4(1) of Directive 2014/65/EU; |
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− | (47) | ‘qualifying holding’ means a qualifying holding as defined in point (36) of Article 4(1) of Regulation (EU) No 575/2013; |
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− | (48) | ‘securities financing transaction’ or ‘SFT’ means SFT as defined in point (11) of Article 3 of Regulation (EU) 2015/2365; |
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− | (49) | ‘segregated accounts’, for the purposes of Table 1 in Article 15(2), means accounts with entities where client money held by an investment firm is deposited in accordance with Article 4 of Commission Delegated Directive (EU) 2017/593 (23) and, where applicable, where national law provides t…
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− | (50) | ‘repurchase transaction’ means a repurchase transaction as defined in point (9) of Article 3 of Regulation (EU) 2015/2365; |
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− | (51) | ‘subsidiary’ means a subsidiary undertaking as defined in point (10) of Article 2 and within the meaning of Article 22 of Directive 2013/34/EU, including any subsidiary of a subsidiary undertaking of an ultimate parent undertaking; |
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− | (52) | ‘tied agent’ means a tied agent as defined in point (29) of Article 4(1) of Directive 2014/65/EU; |
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− | (53) | ‘total gross revenue’ means the annual operating income of an investment firm, in connection with the investment firm’s investment services and activities it is authorised to perform, including income stemming from interest receivable, from shares and other securities whether fixed yield or…
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− | (54) | ‘trading book’ means all positions in financial instruments and commodities held by an investment firm, either with trading intent or in order to hedge positions held with trading intent; |
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− | (55) | ‘positions held with trading intent’ means any of the following:(a)proprietary positions and positions arising from client servicing and market making;(b)positions intended to be resold in the short term;(c)positions intended to benefit from actual or expected short‐term price differences b…
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− | (a) | proprietary positions and positions arising from client servicing and market making; |
− | (b) | positions intended to be resold in the short term; |
− | (c) | positions intended to benefit from actual or expected short‐term price differences between buying and selling prices or from other price or interest rate variations; |
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− | (56) | ‘Union parent investment firm’ means an investment firm in a Member State which is part of an investment firm group and which has an investment firm or a financial institution as a subsidiary or which holds a participation in such an investment firm or financial institution, and which is no…
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− | (57) | ‘Union parent investment holding company’ means an investment holding company in a Member State which is part of an investment firm group and which is not itself a subsidiary of an investment firm authorised in any Member State or of another investment holding company in any Member State; |
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− | (58) | ‘Union parent mixed financial holding company’ means a parent undertaking of an investment firm group which is a mixed financial holding company as defined in point (15) of Article 2 of Directive 2002/87/EC. |
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− 2. The Commission is empowered to adopt delegated acts in accordance with Article 56 to supplement this Regulation by clarifying the definitions set out in paragraph 1 to:
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− | (a) | ensure uniform application of this Regulation; |
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− | (b) | take account, in the application of this Regulation, of developments on financial markets. |
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− ### art_5
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− Article 5
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+ ### Article 6 — Exemptions
− ### art_6
+ **1.** Competent authorities may exempt an investment firm from the application of Article 5 in respect of Parts Two, Three, Four, Six and Seven, where all of the following conditions apply:(a) the investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm …
− Article 6
+ **2.** Competent authorities may exempt investment firms from the application of Article 5 in respect of Part Six where all of the following conditions apply:(a) the investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1);(b) the…
− 1. Competent authorities may exempt an investment firm from the application of Article 5 in respect of Parts Two, Three, Four, Six and Seven, where all of the following conditions apply:
+ **3.** Competent authorities may exempt investment firms from the application of Article 5 in respect of Part Five where all of the following conditions are satisfied:(a) the investment firm is included in the supervision on a consolidated basis in accordance with Chapter 2 of Title II of Part One o…
− | (a) | the investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1); |
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+ ### Article 7 — Prudential consolidation
− | (b) | one of the following conditions is satisfied:(i)the investment firm is a subsidiary and is included in the supervision on a consolidated basis of a credit institution, a financial holding company or a mixed financial holding company, in accordance with the provisions of Chapter 2 of Title II…
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− | (i) | the investment firm is a subsidiary and is included in the supervision on a consolidated basis of a credit institution, a financial holding company or a mixed financial holding company, in accordance with the provisions of Chapter 2 of Title II of Part One of Regulation (EU) No 575/2013; |
− | (ii) | the investment firm is a subsidiary and is included in an investment firm group supervised on a consolidated basis in accordance with Article 7; |
+ **1.** Union parent investment firms, Union parent investment holding companies and Union parent mixed financial holding companies shall comply with the obligations laid down in Parts Two, Three, Four, Six and Seven on the basis of their consolidated situation. The parent undertaking and those of it…
− | (c) | both the investment firm and its parent undertaking are subject to authorisation and supervision by the same Member State; |
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+ **2.** For the purposes of paragraph 1 of this Article, when applying Part Two on a consolidated basis, the rules laid down in Title II of Part Two of Regulation (EU) No 575/2013 shall also apply to investment firms.
− | (d) | the authorities competent for the supervision on a consolidated basis in accordance with Regulation (EU) No 575/2013 or in accordance with Article 7 of this Regulation agree to such an exemption; |
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− | (e) | own funds are distributed adequately between the parent undertaking and the investment firm, and all of the following conditions are satisfied:(i)there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent…
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− | (i) | there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent undertaking; |
− | (ii) | upon prior approval by the competent authority, the parent undertaking declares that it guarantees the commitments entered into by the investment firm or that the risks in the investment firm are of negligible interest; |
− | (iii) | the risk evaluation, measurement and control procedures of the parent undertaking include the investment firm; and |
− | (iv) | the parent undertaking holds more than 50 % of the voting rights attached to shares in the capital of the investment firm or has the right to appoint or remove a majority of the members of the investment firm’s management body. |
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− 2. Competent authorities may exempt investment firms from the application of Article 5 in respect of Part Six where all of the following conditions apply:
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− | (a) | the investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1); |
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− | (b) | the investment firm is a subsidiary and is included in the supervision on a consolidated basis of an insurance or reinsurance undertaking in accordance with Article 228 of Directive 2009/138/EC; |
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− | (c) | both the investment firm and its parent undertaking are subject to authorisation and supervision by the same Member State; |
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− | (d) | the authorities competent for the supervision on a consolidated basis in accordance with Directive 2009/138/EC agree to such an exemption; |
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− | (e) | own funds are distributed adequately between the parent undertaking and the investment firm and all of the following conditions are satisfied:(i)there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent …
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− | (i) | there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent undertaking; |
− | (ii) | upon prior approval by the competent authority, the parent undertaking declares that it guarantees the commitments entered into by the investment firm or that the risks in the investment firm are of negligible interest; |
− | (iii) | the risk evaluation, measurement and control procedures of the parent undertaking include the investment firm; and |
− | (iv) | the parent undertaking holds more than 50 % of the voting rights attached to shares in the capital of the investment firm or has the right to appoint or remove a majority of the members of the investment firm’s management body. |
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− 3. Competent authorities may exempt investment firms from the application of Article 5 in respect of Part Five where all of the following conditions are satisfied:
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− | (a) | the investment firm is included in the supervision on a consolidated basis in accordance with Chapter 2 of Title II of Part One of Regulation (EU) No 575/2013 or is included in an investment firm group for which Article 7(3) of this Regulation applies and the exemption provided for in Articl…
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− | (b) | the parent undertaking, on a consolidated basis, monitors and has oversight at all times over the liquidity positions of all institutions and investment firms within the group or sub‐group that are subject to a waiver and ensures a sufficient level of liquidity for all of those institutions …
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− | (c) | the parent undertaking and the investment firm have entered into contracts that, to the satisfaction of the competent authorities, provide for the free movement of funds between the parent undertaking and the investment firm to enable them to meet their individual obligations and joint oblig…
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− | (d) | there is no current or foreseen material, practical or legal impediment to the fulfilment of the contracts referred to in point (c); |
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− | (e) | the authorities competent for the supervision on a consolidated basis in accordance with Regulation (EU) No 575/2013 or in accordance with Article 7 of this Regulation agree to such an exemption. |
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− ### art_7
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− Article 7
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− 1. Union parent investment firms, Union parent investment holding companies and Union parent mixed financial holding companies shall comply with the obligations laid down in Parts Two, Three, Four, Six and Seven on the basis of their consolidated situation. The parent undertaking and those of its su…
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− 2. For the purposes of paragraph 1 of this Article, when applying Part Two on a consolidated basis, the rules laid down in Title II of Part Two of Regulation (EU) No 575/2013 shall also apply to investment firms.
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+ **3.** Union parent investment firms, Union parent investment holding companies and Union parent mixed financial companies shall comply with the obligations laid down in Part Five on the basis of their consolidated situations.
− 3. Union parent investment firms, Union parent investment holding companies and Union parent mixed financial companies shall comply with the obligations laid down in Part Five on the basis of their consolidated situations.
+ **4.** By way of derogation from paragraph 3, competent authorities may exempt the parent undertaking from compliance with that paragraph, taking into account the nature, scale and complexity of the investment firm group.
− 4. By way of derogation from paragraph 3, competent authorities may exempt the parent undertaking from compliance with that paragraph, taking into account the nature, scale and complexity of the investment firm group.
+ **5.** EBA shall develop draft regulatory technical standards to specify the details of the scope and methods for prudential consolidation of an investment firm group, in particular for the purpose of calculating the fixed overheads requirement, the permanent minimum capital requirement, the K‐facto…
− 5. EBA shall develop draft regulatory technical standards to specify the details of the scope and methods for prudential consolidation of an investment firm group, in particular for the purpose of calculating the fixed overheads requirement, the permanent minimum capital requirement, the K‐factor re…
+ ### Article 8 — The group capital test
− ### art_8
+ **1.** By way of derogation from Article 7, competent authorities may allow the application of this Article in the case of group structures which are deemed to be sufficiently simple, provided that there are no significant risks to clients or to market stemming from the investment firm group as a wh…
− Article 8
+ **2.** For the purposes of this Article, the following shall apply:(a) ‘own funds instruments’ means own funds as defined in Article 9 of this Regulation, without applying the deductions referred to in point (i) of Article 36(1), point (d) of Article 56, and point (d) of Article 66 of Regulation (EU…
− 1. By way of derogation from Article 7, competent authorities may allow the application of this Article in the case of group structures which are deemed to be sufficiently simple, provided that there are no significant risks to clients or to market stemming from the investment firm group as a whole …
+ **3.** Union parent investment firms, Union parent investment holding companies, Union parent mixed financial holding companies and any other parent undertakings that are investment firms, financial institutions, ancillary services undertakings or tied agents in the investment firm group shall hold …
− 2. For the purposes of this Article, the following shall apply:
+ **4.** Competent authorities may allow a Union parent investment holding company or a Union parent mixed financial holding company and any other parent undertaking that is an investment firm, a financial institution, an ancillary services undertaking or a tied agent in the investment firm group, to …
− | (a) | ‘own funds instruments’ means own funds as defined in Article 9 of this Regulation, without applying the deductions referred to in point (i) of Article 36(1), point (d) of Article 56, and point (d) of Article 66 of Regulation (EU) No 575/2013; |
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− | (b) | the terms ‘investment firm’, ‘financial institution’, ‘ancillary services undertaking’ and ‘tied agent’ shall also apply to undertakings established in third countries, which, were they established in the Union, would fulfil the definitions of those terms in Article 4. |
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− 3. Union parent investment firms, Union parent investment holding companies, Union parent mixed financial holding companies and any other parent undertakings that are investment firms, financial institutions, ancillary services undertakings or tied agents in the investment firm group shall hold at l…
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− | (a) | the sum of the full book value of all of their holdings, subordinated claims and instruments referred to in point (i) of Article 36(1), point (d) of Article 56, and point (d) of Article 66 of Regulation (EU) No 575/2013 in investment firms, financial institutions, ancillary services undertak…
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− | (b) | the total amount of all of their contingent liabilities in favour of investment firms, financial institutions, ancillary services undertakings and tied agents in the investment firm group. |
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− 4. Competent authorities may allow a Union parent investment holding company or a Union parent mixed financial holding company and any other parent undertaking that is an investment firm, a financial institution, an ancillary services undertaking or a tied agent in the investment firm group, to hold…
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+ **5.** Union parent investment firms, Union parent investment holding companies, and Union parent mixed financial holding companies shall have systems in place to monitor and control the sources of capital and funding of all investment firms, investment holding companies, mixed financial holding com…
− 5. Union parent investment firms, Union parent investment holding companies, and Union parent mixed financial holding companies shall have systems in place to monitor and control the sources of capital and funding of all investment firms, investment holding companies, mixed financial holding compani…
+ ### Article 9 — Own funds composition
− ### art_9
+ **1.** Investment firms shall have own funds consisting of the sum of their Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital, and shall meet all the following conditions at all times:(a) ,(b) ,(c) ,
− Article 9
− 
− 1. Investment firms shall have own funds consisting of the sum of their Common Equity Tier 1 capital, Additional Tier 1 capital and Tier 2 capital, and shall meet all the following conditions at all times:
− 
− | (a) | , |
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− 
− | (b) | , |
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− | (c) | , |
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+ (i) Common Equity Tier 1 capital is defined in accordance with Chapter 2 of Title I of Part Two of Regulation (EU) No 575/2013, Additional Tier 1 capital is defined in accordance with Chapter 3 of Title I of Part Two of Regulation (EU) No 575/2013, and Tier 2 capital is defined in accordance with Ch…
− | (i) | Common Equity Tier 1 capital is defined in accordance with Chapter 2 of Title I of Part Two of Regulation (EU) No 575/2013, Additional Tier 1 capital is defined in accordance with Chapter 3 of Title I of Part Two of Regulation (EU) No 575/2013, and Tier 2 capital is defined in accordance wit…
− | --- | --- |
+ (ii) *D* is defined in Article 11.
− | (ii) | D is defined in Article 11. |
− | --- | --- |
+ **2.** By way of derogation from paragraph 1:(a) the deductions referred to in point (c) of Article 36(1) of Regulation (EU) No 575/2013 shall apply in full, without the application of Articles 39 and 48 of that Regulation;(b) the deductions referred to in point (e) of Article 36(1) of Regulation (E…
− 2. By way of derogation from paragraph 1:
+ **3.** Investment firms shall apply the relevant provisions set out in Chapter 6 of Title I of Part Two of Regulation (EU) No 575/2013 when determining the own funds requirements pursuant to this Regulation. In applying those provisions, the supervisory permission in accordance with Articles 77 and …
− | (a) | the deductions referred to in point (c) of Article 36(1) of Regulation (EU) No 575/2013 shall apply in full, without the application of Articles 39 and 48 of that Regulation; |
− | --- | --- |
+ **4.** For the purpose of applying point (a) of paragraph 1, for investment firms which are not legal persons or joint‐stock companies or which meet the conditions for qualifying as small and non‐interconnected investment firms set out in Article 12(1) of this Regulation, competent authorities may, …
− | (b) | the deductions referred to in point (e) of Article 36(1) of Regulation (EU) No 575/2013 shall apply in full, without the application of Article 41 of that Regulation; |
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+ **5.** Holdings of own funds instruments of a financial sector entity within an investment firm group shall not be deducted for the purpose of calculating own funds of any investment firm in the group on an individual basis, provided that all of the following conditions are met:(a) there is no curre…
− | (c) | the deductions referred to in point (h) of Article 36(1), point (c) of Article 56, and point (c) of Article 66 of Regulation (EU) No 575/2013, insofar as they relate to holdings of capital instruments which are not held in the trading book, shall apply in full, without the application of the…
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+ ### Article 10 — Qualifying holdings outside the financial sector
− | (d) | the deductions referred to in point (i) of Article 36(1) of Regulation (EU) No 575/2013 shall apply in full, without the application of Article 48 of that Regulation; |
− | --- | --- |
+ **1.** For the purposes of this Part, investment firms shall deduct amounts in excess of the limits specified in points (a) and (b) from the determination of Common Equity Tier 1 items referred to in Article 26 of Regulation (EU) No 575/2013:(a) a qualifying holding, the amount of which exceeds 15 %…
− | (e) | the following provisions shall not apply to the determination of own funds of investment firms:(i)Article 49 of Regulation (EU) No 575/2013;(ii)the deductions referred to in point (h) of Article 36(1), point (c) of Article 56, point (c) of Article 66 of Regulation (EU) No 575/2013 and the re…
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− | (i) | Article 49 of Regulation (EU) No 575/2013; |
− | (ii) | the deductions referred to in point (h) of Article 36(1), point (c) of Article 56, point (c) of Article 66 of Regulation (EU) No 575/2013 and the related provisions in Articles 46, 60 and 70 of that Regulation, insofar as those deductions relate to holdings of capital instruments held in th…
− | (iii) | the trigger event referred to in point (a) of Article 54(1) of Regulation (EU) No 575/2013; the trigger event shall instead be specified by the investment firm in the terms of the Additional Tier 1 instrument referred to in paragraph 1; |
− | (iv) | the aggregate amount referred to in point (a) of Article 54(4) of Regulation (EU) No 575/2013; the amount to be written down or converted shall be the full principal amount of the Additional Tier 1 instrument referred to in paragraph 1. |
+ **2.** Competent authorities may prohibit an investment firm from having qualifying holdings as referred to in paragraph 1 where the amount of those holdings exceed the percentages of own funds laid down in that paragraph. Competent authorities shall make public their decision exercising this power …
− 3. Investment firms shall apply the relevant provisions set out in Chapter 6 of Title I of Part Two of Regulation (EU) No 575/2013 when determining the own funds requirements pursuant to this Regulation. In applying those provisions, the supervisory permission in accordance with Articles 77 and 78 o…
+ **3.** Shares in undertakings other than financial sector entities shall not be included in the calculation specified in paragraph 1 where any of the following conditions is met:(a) those shares are held temporarily during a financial assistance operation as referred to in Article 79 of Regulation (…
− 4. For the purpose of applying point (a) of paragraph 1, for investment firms which are not legal persons or joint‐stock companies or which meet the conditions for qualifying as small and non‐interconnected investment firms set out in Article 12(1) of this Regulation, competent authorities may, afte…
+ **4.** Shares which are not financial fixed assets as referred to in Article 35(2) of Directive 86/635/EEC shall not be included in the calculation specified in paragraph 1 of this Article.
− 5. Holdings of own funds instruments of a financial sector entity within an investment firm group shall not be deducted for the purpose of calculating own funds of any investment firm in the group on an individual basis, provided that all of the following conditions are met:
+ ### Article 11 — Own funds requirements
− | (a) | there is no current or foreseen material, practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent undertaking; |
− | --- | --- |
+ **1.** Investment firms shall at all times have own funds in accordance with Article 9 which amount to at least *D*, where *D* is defined as the highest of the following:(a) their fixed overheads requirement calculated in accordance with Article 13;(b) their permanent minimum capital requirement in …
− | (b) | the risk evaluation, measurement and control procedures of the parent undertaking include the financial sector entity; |
− | --- | --- |
+ **2.** By way of derogation from paragraph 1, where an investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1), *D* shall be defined as the highest of the amounts specified in points (a) and (b) of paragraph 1.
− | (c) | the derogation provided for in Article 8 is not used by the competent authorities. |
− | --- | --- |
+ **3.** Where competent authorities consider that there has been a material change in the business activities of an investment firm, they may require the investment firm to be subject to a different own funds requirement referred to in this Article, in accordance with Title IV, Chapter 2, Section 4 o…
− ### art_10
+ **4.** Investment firms shall notify the competent authority as soon as they become aware that they no longer satisfy or will no longer satisfy the requirements of this Article.
− Article 10
+ ### Article 12 — Small and non‐interconnected investment firms
− 1. For the purposes of this Part, investment firms shall deduct amounts in excess of the limits specified in points (a) and (b) from the determination of Common Equity Tier 1 items referred to in Article 26 of Regulation (EU) No 575/2013:
+ **1.** Investment firms shall be deemed to be small and non‐interconnected investment firms for the purposes of this Regulation where they meet all of the following conditions:(a) AUM measured in accordance with Article 17 is less than EUR 1,2 billion;(b) COH measured in accordance with Article 20 i…
− | (a) | a qualifying holding, the amount of which exceeds 15 % of the own funds of the investment firm calculated in accordance with Article 9 of this Regulation but without applying the deduction referred to in point (k)(i) of Article 36(1) of Regulation (EU) No 575/2013, in an undertaking which is…
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− 
− | (b) | the total amount of the qualifying holdings of an investment firm in undertakings other than financial sector entities that exceeds 60 % of its own funds calculated in accordance with Article 9 of this Regulation but without applying the deduction referred to in point (k)(i) of Article 36(1)…
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− 
− 2. Competent authorities may prohibit an investment firm from having qualifying holdings as referred to in paragraph 1 where the amount of those holdings exceed the percentages of own funds laid down in that paragraph. Competent authorities shall make public their decision exercising this power with…
− 
− 3. Shares in undertakings other than financial sector entities shall not be included in the calculation specified in paragraph 1 where any of the following conditions is met:
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− | (a) | those shares are held temporarily during a financial assistance operation as referred to in Article 79 of Regulation (EU) No 575/2013; |
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− 
− | (b) | the holding of those shares is an underwriting position held for five working days or fewer; |
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− 
− | (c) | those shares are held in the own name of the investment firm and on behalf of others. |
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− 
− 4. Shares which are not financial fixed assets as referred to in Article 35(2) of Directive 86/635/EEC shall not be included in the calculation specified in paragraph 1 of this Article.
− 
− ### art_11
− 
− Article 11
− 
− 1. Investment firms shall at all times have own funds in accordance with Article 9 which amount to at least D, where D is defined as the highest of the following:
− 
− | (a) | their fixed overheads requirement calculated in accordance with Article 13; |
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− 
− | (b) | their permanent minimum capital requirement in accordance with Article 14; or |
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− 
− | (c) | their K‐factor requirement calculated in accordance with Article 15. |
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− 
− 2. By way of derogation from paragraph 1, where an investment firm meets the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1), D shall be defined as the highest of the amounts specified in points (a) and (b) of paragraph 1.
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− 3. Where competent authorities consider that there has been a material change in the business activities of an investment firm, they may require the investment firm to be subject to a different own funds requirement referred to in this Article, in accordance with Title IV, Chapter 2, Section 4 of Di…
− 
− 4. Investment firms shall notify the competent authority as soon as they become aware that they no longer satisfy or will no longer satisfy the requirements of this Article.
− 
− ### art_12
− 
− Article 12
− 
− 1. Investment firms shall be deemed to be small and non‐interconnected investment firms for the purposes of this Regulation where they meet all of the following conditions:
− 
− | (a) | AUM measured in accordance with Article 17 is less than EUR 1,2 billion; |
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− 
− | (b) | COH measured in accordance with Article 20 is less than either:(i)EUR 100 million/day for cash trades; or(ii)EUR 1 billion/day for derivatives; |
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− | (i) | EUR 100 million/day for cash trades; or |
− | (ii) | EUR 1 billion/day for derivatives; |
− 
− | (c) | ASA measured in accordance with Article 19 is zero; |
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− 
− | (d) | CMH measured in accordance with Article 18 is zero; |
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− 
− | (e) | DTF measured in accordance with Article 33 is zero; |
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− 
− | (f) | NPR or CMG measured in accordance with Articles 22 and 23 is zero; |
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− | (g) | TCD measured in accordance with Article 26 is zero; |
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− 
− | (h) | the on‐ and off‐balance‐sheet total of the investment firm is less than EUR 100 million; |
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− 
− | (i) | the total annual gross revenue from investment services and activities of the investment firm is less than EUR 30 million, calculated as an average on the basis of the annual figures from the two‐year period immediately preceding the given financial year. |
− | --- | --- |
− 
+ **2.** The conditions set out in points (a), (b), (h) and (i) of paragraph 1 shall apply on a combined basis for all investment firms that are part of a group. For the purpose of measuring the total annual gross revenue referred to in point (i) of paragraph 1, those investment firms may exclude any …
− 2. The conditions set out in points (a), (b), (h) and (i) of paragraph 1 shall apply on a combined basis for all investment firms that are part of a group. For the purpose of measuring the total annual gross revenue referred to in point (i) of paragraph 1, those investment firms may exclude any doub…
+ **3.** Where an investment firm no longer meets all the conditions set out in paragraph 1, it shall cease to be considered to be a small and non‐interconnected investment firm, with immediate effect.
− 3. Where an investment firm no longer meets all the conditions set out in paragraph 1, it shall cease to be considered to be a small and non‐interconnected investment firm, with immediate effect.
+ **4.** Where an investment firm which has not met all of the conditions set out in paragraph 1 subsequently meets them, it shall be considered to be a small and non‐interconnected investment firm only after a period of six months from the date on which those conditions are met, provided that no brea…
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