On 18 November 2021, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued a public consultation on draft guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP). The draft guidelines have been developed on the basis of Article 45(2) of the Investment Firms Directive (IFD), which mandates the authorities to further specify the common procedures and methodologies for the SREP. The draft guidelines set out the process and criteria for the assessment of the main SREP elements such as business model, governance arrangements and firm-wide controls, risks to capital and capital adequacy and liquidity risk and liquidity adequacy.
The EBA is also consulting on draft regulatory technical standards (RTS) on the additional own funds requirements that could be determined by Member State competent authorities for investment firms. The draft RTS have been developed in consultation with ESMA on the basis of Article 40(6) of the IFD, which mandates the EBA to specify how the risks and elements of risks are to be measured.
Both consultations run until 18 February 2022.
A public hearing will take place via conference call on 18 January 2022 from 11:00 to 12:30.