Content Gen Dashboard

On August 3, 2026, the European Banking Authority (EBA) issued Opinion EBA/Op/2026/08 addressing the application of provisions relating to the boundary between trading book and banking book under the Fundamental Review of the Trading Book (FRTB) framework. The opinion responds to the European Commission's adoption of a third Delegated Act on June 4, 2026, which postponed full implementation of the FRTB framework to January 1, 2027, and introduced targeted operational relief measures and multipliers applicable through December 31, 2029. Article 495v of Regulation (EU) No 575/2013 permits institutions to apply a multiplier to their own funds requirements for market risk under specified conditions. The EBA clarifies that institutions applying this multiplier should determine their own funds requirements based on the boundary framework as it existed prior to June 28, 2023 (the "CRR2 boundary framework"), rather than the newer FRTB boundary framework, to avoid excessive operational complexity and fragmentation. The EBA recommends that institutions not applying the multiplier should receive equivalent flexibility by also being permitted to use the CRR2 boundary framework to ensure a level playing field within the Union. The opinion addresses reporting obligations under Commission Implementing Regulation (EU) 2024/3117, recommending that reporting on trading book composition and reclassifications between books remain suspended until own funds requirement calculations are based on the FRTB boundary framework. Until the earlier of December 31, 2029, or when legislative measures take effect, the EBA recommends that competent authorities should not prioritise supervisory or enforcement action regarding FRTB boundary framework compliance. The EBA notes the European Commission's intention to introduce a legislative proposal in the first quarter of 2027 to provide necessary legal certainty.

On August 3, 2026, the European Banking Authority (EBA) published a no-action letter on the boundary between the banking book and the trading book and shared technical clarifications on issues linked to the European Commission's Delegated Act on amendments to the Basel III Market Risk Rules . The European Commission adopted a third delegated act on June 4, 2026, which postponed full implementation of the Fundamental Review of the Trading Book (FRTB) framework to January 1, 2027. The no-action letter and clarfications are intended to facilitate a consistent and proportionate implementation of the revised framework. The no-action letter sets out the EBA's recommendations that competent authorities do not prioritise supervisory or enforcement action in relation to the FRTB framework governing the boundary between the banking book and the trading book, as well as certain related reporting requirements. Without these clarifications, institutions applying the institution-specific multiplier introduced by the delegated act would face an operationally complex and costly implementation of multiple versions of the boundary framework. Making all other institutions apply a different boundary framework from that of the "multiplier banks" would raise level-playing-field concerns within the Union. The EBA's consideration of the application of the FRTB discusses issues identified so far for which clarifications on the regulatory approach are considered necessary. The EBA recommends that institutions inform their competent authorities of any additional issues identified, particularly where they are material.

meta_id 3372315

Generated

European Banking Authority Issues Opinion on Trading Book and Banking Book Boundary Framework Application

Agent draft

Published

European Banking Authority Publishes No-Action Letter and Technical Considerations Regarding Market Risk Framework