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Q&A for proprietary traders – Introduction

Question:

Following a change DNB made to the prudential regime for proprietary traders, effective from 13 November 2017, the proprietary trading sector has asked various questions about the follow-up and the transition trajectory. This Q&A has been compiled to answer the sector's questions.

Published: 28 February 2024

Answer:

On 13 November 2017, DNB announced that it has changed with immediate effect the prudential regime for proprietary traders that were earmarked by DNB as ‘local firm’ under the Capital Requirements Regulation (CRR). Thereupon, DNB took immediate steps to apply the CRR to the relevant investment firms: the proprietary traders have until 31 March 2018 to comply with the prevailing CRR requirements. By 14 May 2018 at the latest, the relevant investment firms must report to DNB on their capital position, calculated on the basis of the applicable capital requirements under the CRR as per 31 March 2018 (see also DNB’s sector letter of 13 November 2017). In case of a capital shortfall, a proprietary trader is required to compile a recovery plan, based on which it demonstrates that it is able to meet the CRR capital requirements within a reasonable time frame to be determined by DNB, but by 31 December 2019 at the latest. This time frame will be determined for each firm individually. This Q&A provides answers to investment firms that comply with all requirements mentioned in Article 96(1)(b) of the CRR.

This Q&A addresses the following items from the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD):

No rights may be derived from this Q&A. Neither does this Q&A replace the applicable legislation and regulations.