A new prudential regime for EU-regulated investment firms, comprising the Investment Firms Directive (IFD) and Investment Firms Regulation (IFR), was adopted by the Council of the EU on 23 October 2019.
The adopted texts can be accessed here:
Now the text has been approved by the Council of the EU, the adopted legislation is anticipated to be published in the Official Journal of the EU shortly and will enter into force 20 days following publication. IFD must be implemented into local law by EU member states within, and the IFR will apply directly (without local implementation) from, 18 months following entry into force.
Adoption by the Council of the EU has taken place later than anticipated after being adopted by the EU Parliament on 14 April 2019. As a result, the implementation deadline for IFD (and the application of IFR) is anticipated to fall into 2021 and so it may be that the application of the rules will be pushed back, possibly to the first performance year beginning on or after 1 January 2022.
As the Capital Requirements Directive V and Capital Requirements Regulation II will be applicable from 29 December 2020 and 28 June 2021 respectively, as reported here, those firms which will fall under the remit of IFD / IFR could face some uncertainty as to whether the more stringent CRD V requirements would need to be complied with until the IFD / IFR legislation is in effect. We expect clarity on this shortly and we will update you when such clarity is available.
We will shortly circulate a more detailed update focusing on the detail of the IFD / IFR provisions.
If you have any questions about this update or in relation to your remuneration regulation compliance generally, please do contact us.