The Cyprus Securities and Exchange Commission ("CySEC") has issued a notification to entities it regulates and to participants in the market in general of the consultation process regarding a proposed amendment of the EU prudential rules for investment firms.
Under a proposal adopted by the European Commission in December 2017 for a regulation and a directive to amend the current rules, only the largest and most systemic investment firms would remain under the Capital Requirements Directive/Capital Requirements Regulation prudential framework, which was designed for credit institutions, and is regarded as complex and burdensome for non-bank firms providing investment services because it does not specifically address their business specific risks. The vast majority of investment firms would be subject to a new bespoke regime with simpler, more appropriate prudential requirements.
Comments on the proposed legislation may be made via the European Commission's website until 8 March 2018.
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