In 2013, the Capital Requirements package entered into application, comprising Directive 2013/36/EU (CRD IV) and Regulation (EU) No 575/2013 (CRR). The framework, collectively known as CRD IV / CRR, mainly designed for banks, also applies to investment firms, including those which trade commodities. The rules mainly address the amount of capital and liquidity that banks and investment firms hold. These prudential rules are intended to implement the Basel III framework.
CRD IV / CRR legislation:
- Capital Requirements Regulation (CRR): current consolidated version 28/12/2020
- Commission Implementing and delegated acts: CRD IV / CRR provide for the adoption of a large number of delegated and implementing acts in order to give full effect to the banking single rule book. They specify how competent authorities and institutions shall comply with the obligations laid down in CRD IV/CRR. A complete list can be downloaded from the linked page.
- In December 2017, the Commission proposed a review of the prudential framework for investment firms, as set out in CRD IV and MiFID II/MiFIR. Political agreement between the Parliament and Council was reached on 26 February 2019, and Parliament approved the proposal on 18 April 2019.
- Fundamental Review of the Trading Book (FRTB): the FRTB is a comprehensive suite of capital rules developed by the Basel Committee on Banking Supervision (BCBS) as part of Basel III, intended to be applied to banks’ wholesale trading activities. In the EU, the deadline for the FRBT implementation is January 1, 2023.