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New EU Prudential Regime for Investment Firms (IFR/IFD)

The EU has adopted a new harmonised prudential regime that will affect all investment firms authorised in the EU from June 2021. The new Investment Firm Regulation and Directive (IFR/IFD) will treat some firms as credit institutions and subject them to the same prudential rules as deposit-taking banks, while imposing new reporting and governance requirements on others.

The new regime will tailor the requirements based upon the following Investment firm’s categorisation:

Class 1

Systemic and Large Investment Firms with a balance sheet of over €30 billion carrying out bank-like activities will be classified as credit institutions and remain subject to CRD/CRR.

Class 2

Non-Systemic Investment Firms that exceed specific quantitative thresholds will be in scope of all new IFR rules.

Class 3

Non-Systemic firms defined as Small and Non-Interconnected (“SNI”) with a simplified business model and reduced scope of activities will be subject to IFR with limited scope.

More details can be found at the EBA’s website on the: eba.europa.eu

Regulatory reporting and XBRL requirements

Under the IFR most investment firms will have the same regulatory reporting requirements as the current EBA COREP framework and will be required to report on a quarterly basis.

The European Banking Authority (EBA) has issued draft Regulatory Technical Standards (RTS) which provides a detailed description of the prudential requirements. It has also provided a draft of the Implementing Technical Standards (ITS), which contains the technical details of how the EBA collects the data.

The core components of the ITS are:

  • The Quantitative Reporting templates (QRTs) – a set of Excel templates and instructions that describe the data that the investment firm must provide.
  • The Data Point Model (DPM) which links the business definitions and the formal rules, as required by IT specialists.
  • The IFR/IFD XBRL Taxonomy which is used by software systems to convert and validate the data using commercial XBRL software.

Local National Competent Authorities will determine how best to collect the required data; however, it is expected that most if not all will collect using the XBRL format, as they already use XBRL collection systems for credit institutions.

How UBPartner Can Help

UBPartner already helps over 500 companies deliver their XBRL reports with 100% assurance
using its fully certified XBRL Software.
The software is both simple to use and flexible in its deployment options:
On premises solutions –XT Excel Add-in or XT Portal
Cloud solution (SAAS) – XT Cloud Service
This is backed up by in-depth knowledge of XBRL and experience of working on the EBA reporting frameworks,
plus a Support team that cares about making XBRL work for our customers and partners.