On Sep. 11, CZC CB issued compliance notice with EBA guidelines.
CZC CB issued notice on the general EBA guidelines on the application of the group capital test for groups of investment firms in accordance with article 8 of Regulation (EU) 2019/2033 (EBA/GL/2024/03).
Follows EBA Jul. 2024 translated guide for investment groups capital test, #180260.
Main Points
The guidelines specify how competent authorities should implement art 8(1), 8(4) of the IFR Reg 2019/2033 to allow investment firm groups to apply the group capital test.
Or to hold a lower amount of capital than the amount calculated under art 8(3) of IFR.
They apply on individual and consolidated basis to the extent set out in art 8 of IFR.
The Group Capital Test (GCT) can be used at the discretion of the supervisory authority for a group of investment firms as an alternative to prudential consolidation.
In cases where the structure of the group is sufficiently simple and at the same time the group as a whole does not represent significant risks for clients or for the market.
When applying the GCT, the group isn't subject to consolidated capital requirements.
But the parent company must hold capital equal to at least the book value of equity interests in subsidiaries e.g. securities dealers, financial institutions, ancillary services.
The guidelines also set quantitative thresholds for some parameters and a minimum list of data that authorities must receive to assess the group's compliance with them.
Effectiveness
Compliance with the guidelines from the date of their effectiveness, i.e. from Jan. 1, 2025; CZC CB informed EBA of this decision on Sep. 3, 2024.
Regulators
CZC CB
Entity Types
IA; IHC; Inv Co
Reference
Nt, PR, 9/11/2024; EBA/GL/2024/03; IFD/IFR Dir 2019/2034, Reg 2019/2033
