What defines a common platform firm?

A common platform firm is defined by being covered by regulatory frameworks such as the Markets in Financial Instruments Directive (MiFID) or the Capital Requirements Directive (CRD). These directives establish a unified regulatory environment for investment services and market structures across the European Union. Firms operating within this structure must adhere to the standards and regulations set forth by these directives, which promote transparency, investor protection, and stability within the financial markets.

Being covered by MiFID or CRD indicates that the firm is subject to specific rules relating to conduct, capital adequacy, and operational practices. This regulatory oversight is essential for maintaining a harmonized approach to financial regulation across member states, ensuring that firms engage in fair practices and safeguarding against systemic risks.

Other aspects like international operation, minimum capital requirements, or a focus solely on retail banking do not encapsulate the defining characteristics of a common platform firm. Instead, it is the regulatory compliance with MiFID or CRD that solidifies its status as such.