The Commission published in July 2011 a proposal for new capital requirements for credit institutions and MiFID investment firms (CRD IV). The existing Capital Requirements Directive will be replaced with a regulation and a directive: the Capital Requirements Regulation (CRR) and the CRD IV Directive.

Investment firms currently subject to CRD will be faced with higher capital requirements and new governance requirements.

Timing: CRD IV is currently subject to negotiation between the European Parliament and the Council of the EU. The Commission’s aim was for CRD IV to come into force on 1 January 2013. The FSA’s view is that it does not appear feasible that the legislation can enter into force in line with the implementation date of 1 January 2013. The FSA has stated that it will not publish a consultation on CRD IV before the final text of the legislation has been agreed. The FSA has, however, published a webpage on its approach to implementing transitional provisions in the CRR on own funds requirements, the grandfathering of capital instruments, and the application of regulatory adjustments to own funds.