ARTICLE · 02 SEPTEMBER 2021

New Prudential Regime For Investment Firms

ELVINGER HOSS PRUSSEN, société anonyme

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Investment firms offer a variety of services and vary by their size, business model, risk profile and complexity.

LuxembourgStrategy

Elvinger Hoss Prussen

Investment firms offer a variety of services and vary by their size, business model, risk profile and complexity. Considering that their activities and risk profiles were not always properly captured by the prudential framework resulting from the CRR/CRD IV regime, applicable to both credit institutions and investment firms, a new prudential regime comprising the Investment Firms Directive 2019/2034 ("IFD") and the Investment Firms Regulation 2019/2033 ("IFR") was developed at EU level. The new EU regime became effective on 26 June 2021.

What's new? The Luxembourg Law of 21 July 2021 transposes IFD and implements certain operational aspects of IFR ("Law" - available in French). It brings significant amendments to the Law of 5 April 1993 on the financial sector, as amended ("LFS").

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