EBA publishes its final guidelines on the criteria for the exemption of investment firms from liquidity requirements in accordance with Investment Firms Regulation 

The European Banking Authority (EBA) published today its final guidelines on the criteria for the exemption of small and non-interconnected investment firms from the liquidity requirements in accordance with the Investment Firms Regulation (IFR). These Guidelines ensure that all competent authorities granting this exemption follow the same harmonised approach, while preserving the IFR general objective of maintaining the prudential requirements proportional to the size and complexity of the smaller investment firms. 

The IFR introduces mandatory liquidity requirements for all investment firms. However, the IFR aims at further ensuring a proportionate approach for small and non‐interconnected investment firms, which allows competent authorities to completely exempt such firms from liquidity requirements.  

In order to have a harmonised application of the exemption, the EBA guidelines address three main elements: 

• the set of investment services and activities which make an investment firm eligible for the exemption; 

• the set of criteria a competent authority should assess before granting the exemption; 

• guidance for competent authorities when granting and withdrawing the exemption. 

Legal basis and next steps 

The EBA has developed these Guidelines in accordance with Article 43(1) of Regulation (EU) 2019/2033 that provide specific mandates to the EBA to issue Guidelines for the exemption of investment firms from liquidity requirements. The Guidelines apply from two months after issuance date.