Internal Governance: What To Expect Under The IFR & IFD?

Introduction

The Investment Firms Regulation EU 2019/2033 (IFR) and Investment Firms Directive EU 2019/2034 (IFD) establishes a tailored prudential framework for investment firms.  The new prudential regime applies to Class 2 investment firms which are not systemic by virtue of their size and interconnectedness within the wider financial system, i.e. primarily Class 2 type firms (see the classification criteria in our previous publication).

The European Banking Authority (EBA), on 17 December 2020, have published guidelines to further complement the internal governance arrangement, processes and mechanisms within the European Union in line with the requirements introduced by Directive 2019/20134.