Response to consultation Paper on Draft Regulatory Technical Standards related to implementation of a new prudential regime for investment firms
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The said assets are already covered by the own funds requirements of the investment firm providing portfolio management directly to the client. However, the investment firm providing investment advice offer the service to another investment firm which already covered the risk in its own fund requirement. Furthermore, the advisor - contrary to the investment firm which provides the delegated portfolio management - does not have any decision-making power over the said assets.
Therefore, we believe that article 2 (2) of the draft RTS specifying K-factors should be deleted.
2. Another comment we wish to make in the framework of this consultation paper regards the "Draft RTS to specify the calculation of the fixed overheads requirement and
to define the notion of a material change (Article 13 (4) of the IFR)" . In article 1 on the Calculation of the fixed overheads requirement referred to in Article 13(1) of Regulation (EU)
2019/2033, we propose to add the following additional item for deduction as Art. 1 (6) (f): “fees to national types of tied agents”.
The level 1 rules (Investment Firms Regulation, article 13) already require EBA to include deduction of fees to tied agents in its draft regulatory technical standards. At national level, investment firms often cooperate with different types of “agents” for distribution purposes, who have similar rights and obligations to “tied agents”.
In order to guarantee a level playing field between firms, we propose also adding “fees to national types of tied agents” among the listed items for deduction when calculating fixed overheads.
Is the proposed articulation of the K-factors calculation methods, in particular between AUM and CMH and ASA, exhaustive or should any other element be considered?
1. In EBA’s draft RTS specifying the methods for measuring the K-factors referred to in Article 15 of the Regulation, article 2 (Methods for measuring the AUM in cases of non-discretionary advisory arrangements of an on-going nature) contradicts the intention to avoid double counting in its point 2. Point 2 now states that: “Where an investment firm is providing non-discretionary advisory arrangements of an ongoing nature to another financial entity that undertakes discretionary portfolio management, it shall include within its AUM referred to in Article 17 of Regulation (EU) 2019/2033 any amounts of assets that relate to those non-discretionary advisory arrangements.”The said assets are already covered by the own funds requirements of the investment firm providing portfolio management directly to the client. However, the investment firm providing investment advice offer the service to another investment firm which already covered the risk in its own fund requirement. Furthermore, the advisor - contrary to the investment firm which provides the delegated portfolio management - does not have any decision-making power over the said assets.
Therefore, we believe that article 2 (2) of the draft RTS specifying K-factors should be deleted.
2. Another comment we wish to make in the framework of this consultation paper regards the "Draft RTS to specify the calculation of the fixed overheads requirement and
to define the notion of a material change (Article 13 (4) of the IFR)" . In article 1 on the Calculation of the fixed overheads requirement referred to in Article 13(1) of Regulation (EU)
2019/2033, we propose to add the following additional item for deduction as Art. 1 (6) (f): “fees to national types of tied agents”.
The level 1 rules (Investment Firms Regulation, article 13) already require EBA to include deduction of fees to tied agents in its draft regulatory technical standards. At national level, investment firms often cooperate with different types of “agents” for distribution purposes, who have similar rights and obligations to “tied agents”.
In order to guarantee a level playing field between firms, we propose also adding “fees to national types of tied agents” among the listed items for deduction when calculating fixed overheads.