Response to consultation on draft Regulatory Technical Standards on own funds requirements for investment firms based on fixed overheads

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Do you agree with the proposed 20% threshold in Article 36a? Please provide evidence of the potential impact of this threshold.

APFIPP agrees with the proposed 20% threshold. We do not foresee any impact of the introduction of this threshold.

Do you consider it necessary to set a de minimis amount for small investment firms, as set out in Article 36a(5)? If yes, what should the amount be?

APFIPP considers that the inclusion of a de minimis amount would protect small investment firms and would allow them to expand their businesses.

We propose that the de minimis amount should be fixed at EUR 125 000. This figure, when applied to UCITS Fund Managers means that only changes in the business of the firm that imply doubling the initial capital demanded by Article 7(1)(a) of UCITS IV Directive (Directive 2009/65/EC of the European Parliament and the Council of 13 July 2009, on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)) should be considered “material”.

Do you agree with the introduction of the EUR 2 million absolute threshold? If not, what should the amount be?

Not Applicable. Given the current dimension of Portuguese Investment Firms and Fund Managers we do not expect that any change would result in additional requirements of own funds equal or greater than EUR 2 million.

Could you provide any evidence (qualitative or quantitative) or data that would help the EBA to estimate more precisely the potential change in the own funds requirement in your jurisdiction?

Currently, all Investment Firms and Fund Managers own Funds are much higher than the minimum required by Article 97(1) of Regulation (EU) No 575/2013.

The change proposed would, in some cases, determine a greater amount of fixed overheads and, in other, a lesser amount. Nevertheless, even in the cases where the fixed overheads determined by the subtractive are higher than the value that is currently assumed, the own funds already existing are sufficient enough to accommodate the increase in the fixed overheads. So we expect that no additional own Funds are required.

However, recently, when transposing UCITS IV Directive into the Portuguese legal framework, the legislator opted by aligning the own funds required to UCITS Management Companies to those laid down in the UCITS Directive. This will surely result in less own funds being required for Management Companies and, in some cases, the minimum defined in Article 97(1) of Regulation (EU) No 575/2013 may be relevant to the determination of the own funds in those companies.

At this time, the impact assessment does not include a study on how the proposed changes will affect the own funds required by the new Portuguese legislation mentioned in the previous paragraph.

Do you agree with our analysis of the impact of the proposals in this CP? If not, can you provide any evidence or data that might further inform our analysis of the likely impacts of the proposals?

Yes, we agree.

Name of organisation

APFIPP - Portuguese Association of Investment Funds, Pension Funds and Discritionary Asset Management