EBA Amends Technical Standards on Own Funds Application Timing

EBA Press Releases

Published March 19th, 2026

Detected March 20th, 2026

Summary

The European Banking Authority (EBA) has published final draft amending technical standards to shorten the application processing time for reducing own funds and eligible liabilities instruments from four to three months. These amendments aim to reduce regulatory burden for institutions and remove provisions for liquidation entities following recent legislative changes.

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What changed

The European Banking Authority (EBA) has finalized amendments to its Regulatory Technical Standards (RTS) concerning own funds and eligible liabilities. The primary change is the reduction of the processing timeframe for applications from institutions seeking to reduce own funds and eligible liabilities instruments, shortening it from four months to three months. This adjustment is based on the EBA's assessment that authorities now possess sufficient experience to handle these applications more efficiently. Additionally, provisions related to a simplified procedure for liquidation entities seeking to reduce eligible liabilities instruments have been deleted, aligning with the exemption introduced by Directive (EU) 2024/1174.

These amendments are expected to provide immediate benefits by reducing unnecessary regulatory burden for financial institutions. While the effective date for these changes is not explicitly stated, the publication date of the final draft is March 19, 2026. Compliance officers should note the shortened review period for applications and the removal of specific procedures for liquidation entities. The legal basis for these standards is rooted in Articles 78 and 78a of Regulation (EU) No 575/2013.

What to do next

Review updated EBA technical standards on own funds and eligible liabilities.
Note the revised three-month processing timeframe for applications to reduce own funds and eligible liabilities instruments.
Confirm applicability of removed provisions for liquidation entities following Directive (EU) 2024/1174.

Source document (simplified)

The EBA publishes final draft amending technical standards shortening the timing for the application for prior permission to reduce own funds and eligible liabilities instruments

Press Release
19 March 2026

The European Banking Authority (EBA) today published its final draft amending Regulatory Technical Standards (RTS) on own funds and eligible liabilities shortening the timeframe for competent and resolution authorities to process institution’s applications to reduce own funds and eligible liabilities instruments from four to three months. The EBA concluded that authorities now have sufficient experience with these procedures to carry out the assessments more efficiently.

The targeted amendments to the Commission Delegated Regulation on own funds and eligible liabilities, therefore, aim to deliver immediate benefits by reducing unnecessary regulatory burden for institutions. In addition, following the exemption introduced by Directive (EU) 2024/1174 (the Daisy Chain Act), which removes the requirement for liquidation entities to obtain prior permission to reduce eligible liabilities instruments, the RTS provisions setting a simplified procedure for these entities have been deleted.

Legal basis and background

Articles 78 and 78a of Regulation (EU) No 575/2013, as amended by Regulation (EU) 2019/876, mandate the EBA to develop regulatory technical standards specifying, among other elements, the process, time limits, procedures and information requirements for authorities to approve reductions of own funds and eligible liabilities instruments.

The 2021 update of the RTS extended the assessment period from three to four months. Based on the experience gained since then, the EBA now proposes to revert to a three‑month timeframe.