Recital 3

(3)Due to the prudential framework introduced by Directive (EU) 2019/2034 and Regulation (EU) 2019/2033, investment firms that have total consolidated assets below certain thresholds are in principle no longer subject to the capital and liquidity requirements laid down in Directive 2013/36/EU of the European Parliament and of the Council ⁷ and Regulation (EU) No 575/2013 and to the related reporting obligations. Consequently, many of the risk adjustment metrics set out in Delegated Regulation (EU) 2015/63, which are based on such requirements, do not apply anymore to those investment firms. Those investment firms, which are subject to the obligation to contribute to resolution financing arrangements pursuant to Article 103(1) of Directive 2014/59/EU, generally have a lower risk profile and are less systemic than larger investment firms, and are less likely to be placed under resolution, as they are subject to a fixed overheads requirement that should enable them to be liquidated under normal insolvency in case of failure. In line with the principle of proportionality, those investment firms should therefore be subject to a simplified calculation of their contributions to resolution financing arrangements. It is appropriate to subject those investment firms only to the risk adjustment method based on their size (basic annual contribution). To ensure that those investment firms are not placed at a disadvantage compared to how they would be treated under the methodology applicable to all institutions, those investment firms should have the possibility to request the application of the additional risk adjustment based on risk factors, where the application of that methodology would result in a lower contribution amount. To enable resolution authorities to determine which methodology results in the lower contribution, investment firms should in such cases provide resolution authorities with the necessary information. That amendment should not concern small investment firms currently subject to the lump sum regime laid down in Article 10 of Delegated Regulation (EU) 2015/63, that should continue to apply to the investment firms that fall within the scope of that Article. That is justified by the very small size of those investment firms, which entails a lower likelihood of being put into resolution and a limited impact on financial stability and on the resolution financing arrangements in case of resolution.