7 How should the CRD 2013 and the CRR be applied to investment firms?

242. The purpose of this Chapter is to examine how European prudential law, and more specifically the CRD 2013 and the CRR, should be applied to investment firms. Although various shortcomings in the current legislation are highlighted, this Chapter does not provide solutions. The new prudential regime for investment firms included in the IFR and IFD will be discussed in Chapter 9, which addresses some of the concerns raised in this Chapter, and possible solutions to the concerns raised in this Chapter and not addressed in the new regime, will be discussed in Chapter 10. The main purpose of this Chapter is to discuss different aspects of the current prudential legislation for investment firms. Section 7.1 will discuss the scope of the CRD 2013 and the CRR with regard to investment firms and will focus on the difference in the CRD 2013 and the CRR between a ‘firm’ and an ‘investment firm’. Section 7.2 describes the initial capital requirement, own funds requirements and other requirements included in the CRD 2013 and the CRR. Section 7.3 summarizes the key issues discussed in this Chapter.