On Oct. 22, CYP SEC adopted EBA group capital requirement guide.
CYP SEC issued circular confirming adoption of EBA guidelines on the application of the group capital test for investment firm groups under Investment Firms Regulation (IFR).
Follows EBA Apr. 2024 guidelines on application of group capital test, see #180260.
CYP SEC Adoption
Regulator informs Cyprus investment firms that it has adopted the EBA guidelines by incorporating them into its supervisory practices and regulatory approach.
Guidelines specify how competent authorities should implement Articles 8(1) and 8(4) of IFR to allow investment firm groups to apply the group capital test, or to hold a lower amount of own funds than the amount calculated under Article 8(3) of IFR.
The guidelines identify criteria to assist competent authorities in their assessment of the simplicity of the group structure and significance of risk posed to clients, market.
Also envisage simplified assessment of criteria for groups that include only small, non-interconnected investment firms; and include both quantitative and qualitative criteria.
The guidelines also provide methodology to guide competent authorities in assessment of the adequacy of own funds requirement of third country undertakings of EU groups.
Apply on an individual and consolidated basis within scope of Article 8 of IFR, are addressed to investment firms within scope of IFR, Investment Firms Directive (IFD).
