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IFD/IFR implementation & advice

IFD/IFR implementation & advice

For several brokerage firms & investment firms in Belgium

About the clients

The clients for this project are brokerage firms and investment firms that are considered Class 2 or Class 3 according to the new prudential framework for the Investment Firms Regulation & Directive. 

The challenge

The European Commission and Council have developed a new prudential regime more tailored to the nature of risks that investment firms face. Investment firms (IFs) that are authorized under MIFID II, need to comply with the new prudential requirements defined in the Investments Firm Regulation EU 2019/2033 (IFR) and Investment Firms Directive EU 2019/2034 (IFD). 

Investment firms and brokerage firms needed to prepare for this new prudential regime to become compliant, since it became applicable in June 2021. The IFD/IFR regulation impacts the way liquidity and capital requirements are calculated and the new regulation also has significant consequences on the reporting and disclosures obligations, the internal governance and the remuneration framework within investment firms. 

The extent to which an IF is impacted depends on which class the IF is considered to be. Several investment firms and brokerage firms in Belgium and Luxemburg relied on b.fine to guide them through the preparation process.

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How b.fine supports the client

It was important for investment firms and brokerage firms to prepare well for this new regulation and because of the proportionality principle, the new regulatory requirements are applied differently depending on the category into which IFR is classifying these investment firms.

 Several investment firms and brokerage firms relied on b.fine to implement the requirements that apply to them. Thanks to our solid in-depth knowledge in regulatory reporting and expertise in technology, we were able to help IFs prepare for the new regulation and implemented the adequate platform. First we analyzed all the data to determine whether the investment firm is a class 1, class 2 or class 3 firm. Depending on the classification, the requirements were different. We assisted the IFs with the K-factor risk assessment to determine the capital and liquidity risk requirements. 

We made an as-is analysis of the current reporting situation and implemented the b.rx platform to manage the regulatory reporting processes for investment firms. An adapted set of templates was integrated and the reporting functionalities in b.rx were adapted based on the class the IFs belonged to. In this way, the b.rx technology takes care of the reporting supply chain so they don’t have to worry about not being compliant in time.

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