9.2.2.2 Fixed overhead requirement

399. Furthermore, all investment firms are subject to the fixed overhead requirement. The fixed overhead requirement requires an investment firm to hold 25% of its fixed costs over the preceding fiscal year as a capital requirement if this is the highest requirement. The fixed overhead requirement is part of the “higher of” requirements in the IFR, requiring investment firms to hold the highest amount of their permanent minimum requirement, the outcome of their K-factor calculations and their fixed overhead requirement. The method used to calculate the fixed overhead requirement itself has not changed between the CRR regime and the IFR. Under the CRR, the EBA developed a Delegated Regulation1 that also concerned the fixed overhead requirement, pursuant to article 97 of the CRR. However, “while the FOR under CRR was developed for investment firms with limited authorisation, the FOR in the IFR act as minimum to the capital requirements for all classes of investment firms”.2 As such, the EC instructed the EBA to develop a new delegated regulation,3 given the new scope of the fixed overhead requirement and given that the fixed overhead requirement has become the minimum requirement for all investment firms.