ESMA_QA_1311

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1311

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Regulatory Context

Regulation : MIF2

Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Ancillary activity

Subject Matter: Calculation of denominator

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Question

Submission Date: 23 September 2022

Should the denominator in the capital employed test under Article 5(4) of CDR 2021/1833 be calculated using consolidated accounts? Should firms use capital on a worldwide basis or just capital employed within the EU?

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ESMA Answer

Answer Date: 23-09-2022

[ESMA70-872942901 Commodity derivatives, Ancillary services, Q&A 10] The CDR 2021/1833 RTS 20 capital employed test should be calculated using consolidated accounts. According to Article 5(4) of CDR 2021/1833, the capital employed for carrying out the main business of a group shall be the sum of the total assets of the group minus its short-term debt as recorded in the consolidated financial statements of the group at the end of the relevant annual calculation period. Firms shall use capital employed on a worldwide basis when calculating the capital test.

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This document was automatically extracted from the ESMA EMIR Q&A database.