The Investment Firms Regulation ((EU) 2019/2033) (IFR) and the Investment Firms Directive ((EU) 2019/2034) (IFD) established a new framework for prudential requirements for investment firms.

The European Commission published its legislative proposal for the IFR and the IFD in December 2017 and the legislation was published in the Official Journal of the EU in December 2019.

This note considers the background to the Commission's proposals for the IFR and the IFD, including the EBA's review of the prudential regime for investment firms that the proposals were based on. It also considers the legislative history of the IFR and the IFD and the stages of the process that led to its adoption by the European Parliament and the Council of the EU.