On 17 May 2023, the European Commission published Commission Delegated Regulation (EU) /… supplementing the Investment Firms Directive with regard to regulatory technical standards for the specific liquidity measurement of investment firms under Article 42(6) of that Directive. The technical standards under the draft Delegated Regulation have been developed in accordance with Article 42(6) of the Investment Firms Directive (IFD) and were the subject of an earlier consultation by the European Banking Authority.
The draft technical standards set out comprehensive elements that may raise major concerns about investment firms’ liquidity risk and that the competent authorities must consider when assessing the materiality of those risks. Member State competent authorities are therefore required to assess all services that an investment firm performs, including ancillary services. Furthermore, Member State competent authorities are required to consider all specific aspects of the investment firm’s funding, external events, operational and reputational events, internal governance, and group structure, when relevant to liquidity risks.
The draft Delegated Regulation enters into force on the twentieth day following that of its publication in the Official Journal of the European Union.