On 12 May 2023, the European Banking Authority (EBA) issued a final report containing draft regulatory technical standards (RTS) on the scope and methods for consolidation of an investment firm group under the Investment Firms Regulation (IFR). The final report follows a consultation paper that the EBA published in June 2020 which included draft RTS on the prudential consolidation of investment firm groups.

The EBA has developed the draft RTS in accordance with the mandate given to it under Article 7(5) of the IFR. The draft RTS seek to ensure that prudential consolidation is carried out in a harmonised and consistent way. They detail the scope and methods for prudential consolidation, as well as the methodology for the consolidation of capital requirements and the rules applicable for minority interest and additional Tier 1 and Tier 2 instruments issued by subsidiaries in the context of prudential consolidation.

The draft RTS will be submitted to the European Commission for endorsement before being published in the Official Journal of the European Union. The RTS will apply 20 days after entry into force.

The draft RTS also complete the EBA Roadmap on investment firms.