A Word From Our Sponsor - Axiom
For regulatory purposes, to date, investment firms have been considered credit institutions and accordingly report under the Basel-driven capital requirements regulation (CRR). But the CRR approach is too broad to effectively account for the risks faced by both investment firms and credit institutions — given their different primary business models and risk profiles.
Thus, the new Investment Firms Regulation (IFR), according to the Investment Firms Directive (IFD), seeks to create a regulation with requirements that are proportionate to the size of the firms expected to comply based on designated categories. However, just as it may be surprising that kryptonite makes Superman weak, the IFR/IFD regime unexpectedly makes things more problematic, given its complex categorization, calculation and reporting requirements.
Are The Complexities Of The New IFR Regime To Investment Firms As Kryptonite Is To Superman?