The Capital Requirements Directive IV (CRD IV) - Waystone

      The Capital Requirements Directive IV (CRD IV)

      The EU legislative package that contains prudential rules for banks, building societies and investment firms.

      The Capital Requirements Directive IV (CRD IV) is an EU legislative package that contains prudential rules for banks, building societies and investment firms.

      CRD IV was implemented in the UK through EU Regulation with effect from 1 January 2014. The FCA has implemented these rules via the IFPRU section of the FCA Handbook.

      Intended to implement the EU Basel III agreement, CRD IV includes enhanced requirements for:

      • the quality and quantity of capital
      • the basis for new liquidity and leverage requirements
      • rules for counterparty risk
      • macroprudential standards including a countercyclical capital buffer and capital buffers for systemically important institutions.

      CRD IV also makes changes to corporate governance rules, including remuneration and introduces standardised EU regulatory reporting (COREP and FINREP).

      Who does CRD IV apply to?

      Firms affected by CRD IV include:

      • brokerage firms
      • sole traders
      • broker-dealers
      • commodities traders
      • spread betters
      • asset managers.

      If CRD IV applies to your firm and you are uncertain as to how it affects you, contact our prudential specialists for expert practitioner advice and support, including:

      • advice on how the requirements impact a firm as driven by its Part IV permissions
      • advice on formatting templates for capital adequacy computations in line with RTS (Regulatory Technical Standards)
      • advice and assistance on preparation of specific documentation (ICAAPs, remuneration and liquidity policies)
      • preparing prudential returns in the requisite XBRL format.

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