The Regulation (EU) 2019/2033 establishes a comprehensive framework for the prudential requirements applicable to investment firms. It aims to enhance the quality and consistency of capital held by these firms, ensuring their resilience against financial pressures while addressing the unique risks they present compared to credit institutions. Key provisions include defining own funds requirements, K-factors to measure risks to clients, markets, and firms, as well as establishing liquidity requirements based on fixed overheads. Investment firms classified as small and non-interconnected benefit from simplified capital and reporting requirements, helping to support their growth and stability.

This regulatory framework is designed to create a level playing field across Member States while allowing for proportional rules based on the profile and impact of each firm. It includes stringent reporting obligations, aimed at enhancing transparency and promoting sound risk management practices within the industry.