EBA RTS Shortens Own Funds Reduction Application Timeline to 3 Months
Summary
The European Banking Authority published final draft amending regulatory technical standards (RTS) under Articles 77, 78 and 78a of CRR (Regulation 575/2013), shortening the timeframe for authorities to process applications for prior permission to reduce own funds and eligible liabilities instruments from four to three months. The amendments also remove simplified procedures for liquidation entities following the Daisy Chain Directive (2024/1174).
What changed
The EBA has published final draft amending RTS that reduce the processing timeline for institutions seeking prior permission to reduce own funds and eligible liabilities instruments from four months to three months. This change reflects authorities' accumulated experience with these procedures enabling more efficient assessments. The amendments also delete provisions for simplified procedures applicable to liquidation entities, following the exemption introduced by Directive 2024/1174.
The draft RTS will now be submitted to the EU Commission for endorsement, followed by scrutiny by the European Parliament and Council before publication in the Official Journal. Entry into force occurs 20 days after OJ publication. Banks and credit institutions should note the shortened timeline when planning own funds reduction transactions requiring prior permission, though the substantive permission requirements remain unchanged.
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Apr 2, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 2, 2026
EBA Draft RTS On The Timing For The Application For Prior Permission To Reduce Own Funds And Eligible Liabilities Instruments
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The European Banking Authority (EBA) has published final draft amending regulatory technical standards (RTS) shortening the timing for the application for prior permission to reduce own funds and eligible liabilities instruments under Articles 77, 78 and 78a of the capital requirements regulation (Regulation 575/2013). The amendments shorten the timeframe for competent and resolution authorities to process an institution's application to reduce own funds and eligible liabilities instruments from four to three months on the basis that authorities now have sufficient experience with these procedures to carry out the assessments more efficiently. In addition, following the exemption introduced by Directive 2024/1174 (the Daisy Chain Directive), which removes the requirement for liquidation entities to obtain prior permission to reduce eligible liabilities instruments, the provisions setting a simplified procedure for these entities have been deleted. The draft regulatory technical standards will be submitted to the EU Commission for endorsement following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union (OJ). They will enter into force 20 days after publication in the OJ.
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