ESMA · ESMA_QA_1311 Answer Published
Calculation of denominator
- Regulation
- Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
- Topic
- Ancillary activity
- Submitted
- 2022-09-23
- Answered
- 2022-09-23
Question
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?
Answer
[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.
This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.
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