On 15 October 2025, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued their technical advice in response the European Commission’s (Commission) Call for Advice (CfA) on the Investment Firms Regulation (IFR) and Investment Firms Directive (IFD).

Background

Article 60 of the IFR and Article 66 of the IFD mandate the Commission to submit a report to the Council and to the European Parliament regarding multiple aspects of the IFR and IFD. In its report, the Commission may include a legislative proposal to amend the prudential framework applicable to investment firms. The report by the Commission shall include an all-encompassing assessment of the provisions of the IFR and IFD.

Against this background, on 1 February 2023 the Commission submitted a CfA to the EBA and ESMA, aimed at covering the elements mentioned in those two articles. Following the CfA the EBA and ESMA issued a Discussion Paper in June 2024. The deadline for comments on the Discussion Paper was 3 September 2024.   

Final Report

In the Final Report the EBA and ESMA highlight areas where higher or lower alignment with the banking framework would be beneficial. They also identifythe need to improve definitions, calculation methodologies, and thresholds monitoring for investment firms, while emphasising the importance of harmonising the scope of calculation to ensure consistent application of the framework.

Furthermore EBA and ESMA cover a wider range of topics, including the adequacy of own funds requirements, the implications of the Banking Package, the prudential consolidation of investment firm groups, and aspects related to remuneration. They also consider the interactions between the IFR/IFD framework and other regulations, namely the Market in Crypto-Assets Regulation, the Undertakings for Collective Investment in Transferable Securities, and the Alternative Investment Funds Managers Directives.

Dedicated text boxes highlight the key recommendations on the prudential framework.

Next steps

The EBA and ESMA will submit the joint report to the Commission.