FIA EPTA welcomes the opportunity to respond to the EBA’s consultation paper (the Consultation Paper) on proposed revised Regulatory Technical Standards relating to the reclassification of investment firms as credit institutions in accordance with Article 8a(6)(b) of Directive 2013/36/EU (the Reclassification RTS). FIA EPTA has consistently welcomed the new prudential regime for investment firms contained in the Investment Firm Regulation and Directive (IFR/IFD), which is aimed at creating a tailored and proportionate prudential framework for firms such as those we represent. In line with this, we have consistently argued for a robust, fair and proportionate prudential regime to be applied to our members.
FIA EPTA notes that the EBA’s intention in revising the draft Reclassification RTS is to ensure a level playing field. However, we have strong concerns that the revised draft, in fact risks creating a highly unlevel playing field among similarly sized EU firms with similar risk profiles. We therefore urgently suggest to the EBA to adopt a different approach which would mitigate such unintended consequences. To this end, FIA EPTA proposes for the Reclassification RTS to 2 apply a group threshold which focuses on the assets of relevant EU firms and EU branches rather than a global group assets test. We are confident that this alternative approach is fully consistent with both the spirit and the letter of the Level 1 text, while minimising any undue side effects. This alternative approach is set out in more detail in Sections 4 and 5.
