Regulation 2019/2033 - Prudential requirements of investment firms - Main contents
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official title
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| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2019/2033 |
| Original proposal | COM(2017)790  |
| CELEX number i | 32019R2033 |
| Document | 27-11-2019; Date of signature |
|---|---|
| Publication in Official Journal | 05-12-2019; OJ L 314 p. 1-63 |
| Signature | 27-11-2019 |
| Effect | 25-12-2019; Entry into force Date pub. +20 See Art 66.1 25-12-2019; Application Partial application See Art 66.3(b) 26-03-2020; Application Partial application See Art 66.3(a) 26-06-2021; Application See Art 66.2 |
| Deadline | 25-12-2019; See Art 56.2 And 57.6 And 58, 59 26-12-2020; See Art 54.3 And 55.5 26-06-2021; See Art 52.3 And 57.3 And 57.4, 57.5 31-12-2021; See Art 60.2 26-12-2022; See Art 53 26-06-2024; Review See Art 60.1 25-06-2026; See Art 57.6 26-06-2026; See Art 57.1 And 57.2 |
| End of validity | 31-12-9999 |
5.12.2019 |
EN |
Official Journal of the European Union |
L 314/1 |
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)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) |
Robust prudential requirements are an integral part of the regulatory conditions under which financial institutions provide services within the Union. Investment firms are, together with credit institutions, subject to Regulation (EU) No 575/2013 of the European Parliament and of the Council (4) and to Directive 2013/36/EU of the European Parliament and of the Council (5) as regards their prudential treatment and supervision, while their authorisation and other organisational and conduct requirements are set out in Directive 2014/65/EU of the European Parliament and of the Council (6). |
(2) |
The existing prudential regimes under Regulation (EU) No 575/2013 and Directive 2013/36/EU are largely based on successive iterations of the international regulatory standards set for large banking groups by the Basel Committee on Banking Supervision and only partially address the specific risks inherent to the diverse activities of a large number of investment firms. The specific vulnerabilities and risks inherent to those investment firms should therefore be specifically addressed by means of appropriate and proportionate prudential arrangements at Union level. |
(3) |
The risks which investment firms themselves incur and pose for their clients and the wider markets in which they operate depend on the nature and volume of their activities, including whether investment firms act as agents for their clients and are not party to the resulting transactions themselves, or whether they act as principals to the trades. |
(4) |
Sound prudential requirements should ensure that investment firms are managed in an orderly way and in the best interests of their clients. They should take into account the potential for investment firms and their clients to engage in excessive risk‐taking and the different degrees of risk assumed and posed by investment firms. Equally, such prudential requirements should aim to avoid imposing an undue administrative burden on investment firms. |
(5) |
Many of the prudential requirements that stem from the framework of Regulation (EU) No 575/2013 and Directive 2013/36/EU are designed to address common risks faced by credit institutions. Accordingly, the existing requirements are largely calibrated to preserve the lending capacity of credit institutions through economic cycles and to protect depositors and taxpayers from possible failure, and are not designed to address all of the different risk profiles of investment firms. Investment firms do not have large portfolios of retail and corporate loans and do not take deposits. The likelihood that their failure can have a detrimental impact on overall financial stability is lower than in the case of credit institutions. The risks faced and posed by most investment firms are thus substantially different to the risks faced and posed by credit institutions and such differences should be clearly reflected in the prudential framework of the Union. |
(6) |
The... |
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