EU investment firms prudential regime ('IFR/D')


The new EU Investment Firms Regulation (IFR) and Investment Firms Directive (IFD) is a new, bespoke EU prudential regime for MiFID investment firms. The IFD/IFR began to apply to firms from 26 June 2021.

The IFR/IFD introduces own funds, liquidity assets, remuneration, governance, and reporting requirements. Some firms which are below specified thresholds will be subject to a more limited set of requirements. AIMA has provided commentary throughout the framework's legislative process and to the various RTS/ITS that the EBA has sought feedback on.

On 19 October, the EBA has published its final RTS on investment policy disclosures under the IFR. This will apply to Class 2 investment firms (i.e., non-SNIs) with on- and off-balance sheet assets on average greater than EUR 100 million. These firms will have to disclose this information in relation to those companies whose shares are admitted to trading on a regulated market and in which the proportion of voting rights exceeds 5% of all voting rights issued by the company. The first disclosure date was 31 December 2021.

On 22 November, the EBA and ESMA published have published two separate reports under the IFD, containing (i) Guidelines on sound remuneration policies and (ii) Guidelines on internal governance. Both Guidelines apply to Class 2 firms, taking into account the proportionality principle. Both Guidelines will apply as of 30 April 2022.

The EBA and ESMA also invited views on their draft Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) and on their draft Regulatory Technical Standards on Pillar 2 add-ons for investment firms. Both are based on the IFD and are addressed to NCAs supervising Class 2 and Class 3 firms (non-SNIs and SNIs, resp.). AIMA provided a response to the EBA's draft RTS on Pillar 2 add-ons. Note that both documents would apply from 1 January 2023.

The EBA also sought views on their draft Guidelines on data collection exercises regarding high earners and its draft Guidelines on remuneration and gender pay gap benchmarking exercise for investment firms. 


(Last updated: 2 September 2022)

Other related workstreams


From ESMA proposals to modify the scope of the transaction reporting requirement to FCA proposals to remove RTS 27 and RTS 28 best execution reports, reviews of the MiFID II/MiFIR regulatory framework at EU and UK level are currently underway. See here for an overview of developments and AIMA’s regulatory and policy engagement.

EU Remuneration

IFR/IFD remuneration requirements effective as of 26 June 2021. EBA and ESMA have publish their updated IFD and MiFID II remuneration guidelines, respectively. Notable other EU remuneration requirements under AIFMD and the UCITS Directive are also linked.

Other resources

IFR/D Official Texts

All of the directives, regulations, amending texts, ESA texts, etc. that apply to the prudential regime for EU investment firms all in one spot.