IFR / IFD

The Investment Firms Regulation (IFR) alongside Directive (EU) 2019/2034 (IFD) is a CRR2 derivative regulatory regime, specifically designed to better address the capital requirements of Investment Firms.

They have entered into force in December 2019 with expected application date June of 2021 in EU and January of 2022 in UK (IFPR) , almost completely changing the way capital requirements will be calculated for Investment Firms.

The new regulatory regime applies to ALL Investment Firms authorised and supervised under the MiFID II.

It introduces new prudential classifications with different reporting requirements.

It is expected that the vast majority of Investment Firms will fall within Class 2 which will be subject to the full reporting obligations under IFR and in particular to the new methodology, K-Factors.

Class 3 will only capture small and non-interconnected investment firms that fall below the K-Factor thresholds.

Very large Investment Firms will be categorised as Class 1 Firms and will remain under CRR2 and be treated like Banks and will be reporting to SSM.

K-Factors

The K-Factor methodology introduces an array of metrics focused on the Firm’s investment and trading activities, require historical data and early tests show that will increase the capital requirements in contrast with CRR.

Regtify is a regulatory technology firm focused, in the last 4 years, in the capital requirements regulation. We have developed the first cloud native, easy to use, affordable capital requirements engine in EU that was able to help Investment Firms to easily monitor their capital requirements on a daily basis, without the need of external support and without the need to extensively study the Capital Requirements Regulation (CRR).

We can help you not only do your impact assessment but actually get ready to monitor and report to your Competent Authorities, ahead of the application date.