IFD finally implemented into Dutch law

What is this about?

The Investment Firm Regulation (IFR) and the Investment Firm Directive (IFD) comprise the new prudential regime for investment firms. Whereas the IFR applied directly as of 26 June 2021, the Dutch implementation process of the IFD into the Financial Supervision Act (FSA) was delayed until 19 October 2021. On this same date, the IFD remuneration rules (laid down in a separate Regulation) entered into force too.

Which parties should care?

The IFR and IFD apply to investment firms licensed and authorised under MiFID II. However, the FSA goldplates the new prudential regime by bringing fund managers with a MiFID top-up partially in scope as well.

What should they know?

Among others, the FSA now includes requirements:

• on initial capital;
• on the internal capital adequacy assessment process and internal-risk assessment process;
• on governance, transparency and treatment of risks;
• relating to the supervisory review and evaluation process; and
• for fund managers with a MiFID top-up by goldplating of the scope of the IFR (which includes requirements on own funds, capital, liquidity, disclosure and reporting) and IFD.

Furthermore, the Controlled Remuneration Policy Regulation 2021 ("CRPR 2021") implements the IFD remuneration rules, which will apply to so-called Class 2 investment firms.

When does this become relevant?

Whereas the IFR does provide for a transitional regime, the IFD does not. Therefore, the requirements in the FSA and the CRPR 2021 (on IFD remuneration requirements) apply immediately as of 19 October 2021.

Any further thoughts?

With the abovementioned developments, the Dutch implementation process is not yet completed. The status of the following developments remains unclear:

• the IFD implementing decree, which fleshes out some of the new rules in the FSA;
• the DNB Regulation on Reporting Requirements under the IFD / IFR; and
• the DNB Regulation on Specific Provisions under the IFD / IFR, which specifies how the IFR regime applies to fund managers with a MiFID-top up.