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Prudential requirements and supervision of investment firms [EU Legislation in Progress]

Written by Monika Kiss (2nd edition, updated on 15.01.2020),

© ipopba / Fotolia

Investment firms play an important role in capital markets, facilitating savings and investment flows across the EU. However, the current EU rules are seen as fragmented, overly complex, inconsistently applied and often a poor fit for the actual risks taken by the various types of investment firms. The Commission proposed a new regulation on the prudential requirements of investment firms and a new directive on the prudential supervision of investment firms. These proposals update the framework for investment firms, making it more effective and more closely calibrated to the size and nature of the various investment firms and their risks. Parliament’s Committee on Economic and Monetary Affairs (ECON) agreed its report and negotiating mandate on 24 September 2018. On 20 March 2019, provisional agreements were reached by Parliament and Council negotiators. Parliament adopted the texts at first reading on 16 April 2019. Following linguistic corrections, corrigenda were endorsed by Parliament in October, and the regulation and directive were adopted by the Council then signed into law on 27 November. Both will apply in full from 26 June 2021.


Proposal for a regulation of the European Parliament and of the Council on the prudential requirements of investment firms and amending Regulations (EU) No 575/2013, (EU) No 600/2014 and (EU) No 1093/2010;
Proposal for a directive of the European Parliament and of the Council on the prudential supervision of investment firms and amending Directives 2013/36/EU and 2014/65/EU
Committee responsible: Economic and Monetary Affairs (ECON) COM(2017) 790
COM(2017) 791
Rapporteur: Markus Ferber (EPP, Germany) 2017/0359 (COD)
2017/0358 (COD)
Shadow rapporteurs:



Mady Delvaux (S&D, Luxembourg)
Bernd Lucke (ECR, Germany)
Nils Torvalds (ALDE, Finland)
Miguel Viegas (GUE/NGL, Portugal)
Sven Giegold (Greens/EFA, Germany)
Barbara Kappel (ENF, Austria)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Procedure completed. Regulation (EU) 2019/2033
Directive (EU) 2019/2034
OJ L 314, 5.12.2019, pp.1-114

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