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Circular C246 (European Banking Authority (“EBA”) opinion on the design of new prudential framework for Investment Firms)

Through the Circular, CySEC wishes to inform Cyprus Investment Firms (“CIFs”) regarding the following:

  1. EBA issued an opinion on the design and calibration of a new prudential framework for Investment Firms dated 29.09.17 (“the Opinion”), that is specifically tailored to the needs of Investment Firms’ different business models and inherent risks;
  2. EBA has developed the Opinion in response to EU Commission’s call for advice on 13.06.16, on the design of a new prudential framework for MiFID Investment Firms for which the current prudential regime of the Capital Requirements Directive (“CRD”) and Capital Requirements Regulation (“CRR”) is not appropriate.

CySEC’s expects that: CIFs authorised to provide MiFID Services and Activities shall take into consideration the Opinion that includes recommendations which aim to develop a single, harmonised set of requirements that are reasonably simple, proportionate and relevant to the nature of Investment Firms. The Opinion covers the design and calibration of capital and liquidity requirements, consolidated supervision, reporting requirements, the suitability of the proposed framework for commodity derivatives firms and the need of macro-prudential tools.

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