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CSSF: Commission Delegated Regulation (EU) No 2017/653 of 8 March 2017

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Last Updated on June 3, 2025 by Arnaud Collignon

Understanding the Commission Delegated Regulation (EU) No. 2017/653

The Commission Delegated Regulation (EU) No. 2017/653, adopted on March 8, 2017, plays a crucial role in the regulatory framework governing financial markets within the European Union. This regulation is primarily focused on the implementation of the Capital Requirements Directive IV (CRD IV), which aims to enhance the stability and resilience of the financial sector.

Key Objectives of the Regulation

  • Strengthening Capital Requirements: The regulation establishes stringent capital requirements for financial institutions to ensure they can withstand economic shocks.
  • Enhancing Transparency: It mandates greater transparency in the financial markets, allowing stakeholders to make informed decisions.
  • Risk Management: The regulation emphasizes the importance of effective risk management practices within financial institutions.

Important Provisions

Some of the significant provisions included in the regulation are:

  • Leverage Ratio: Introduction of a leverage ratio framework to limit excessive borrowing.
  • Liquidity Coverage Ratio (LCR): Requirements for maintaining sufficient liquid assets to cover short-term obligations.
  • Net Stable Funding Ratio (NSFR): Encouragement of stable funding sources to support long-term financial stability.

Impact on Financial Institutions

The implementation of this regulation has profound implications for financial institutions, including:

  • Increased compliance costs due to the need for enhanced reporting and risk management systems.
  • Greater scrutiny from regulatory bodies, necessitating a proactive approach to compliance.
  • Improved financial stability, which ultimately benefits the broader economy.

Conclusion

In summary, the Commission Delegated Regulation (EU) No. 2017/653 is a pivotal element of the EU’s financial regulatory framework. By reinforcing capital requirements and promoting transparency, it aims to foster a more resilient financial sector.

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