EBA publishes final draft amending standards to shorten application processing time for own funds reductions

The European Banking Authority (EBA) has published its final draft amending Regulatory Technical Standards (RTS) on own funds and eligible liabilities. The amendments aim to shorten the processing timeframe for authorities to approve reductions from four to three months, based on increased experience with these procedures.

The targeted amendments to the Commission Delegated Regulation seek to reduce unnecessary regulatory burdens for institutions. Additionally, following the exemption introduced by Directive (EU) 2024/1174 (the Daisy Chain Act), which removes the need for liquidation entities to obtain prior permission to reduce eligible liabilities, the RTS provisions for these entities have been deleted.

Legal basis for these standards includes Articles 78 and 78a of Regulation (EU) No 575/2013, as amended by Regulation (EU) 2019/876. The 2021 update extended the assessment period from three to four months. The EBA now proposes to revert to a three-month timeframe based on operational experience.