EBA Guidance

Key dates

2026-06-04

European Commission adoption of the 3rd FRTB Delegated Act under Article 461a CRR modifying own funds requirements for market risk for a three-year period

2026-08-03

EBA publication of no-action letter on the trading/banking book boundary and internal risk transfers, and technical considerations on FRTB application

2027-01-01

Start of modified calculation of own funds requirements for market risk under the 3rd FRTB Delegated Act for a three-year period

Suggested considerations

• Compliance teams at EU banks should consider reviewing the EBA no-action letter to understand which aspects of the FRTB boundary between banking book and trading book, internal risk transfers, and related reporting are currently deprioritised for supervisory or enforcement action, and how this interacts with national competent authority expectations.
• Risk and regulatory capital teams may wish to map their existing and planned FRTB implementation (standardised and internal models approaches) against the technical considerations published by the EBA, focusing on how the 3rd FRTB Delegated Act’s institution-specific multiplier and related boundary rules affect market risk capital calculations from 2027-01-01.
• Firms should consider identifying whether they fall within the scope of "multiplier banks" under the Delegated Act and assess operational implications, including whether their systems and data architecture can support a single, harmonised boundary framework rather than multiple versions during the three-year transitional period.
• Supervisory reporting and Pillar 3 disclosure teams may wish to analyse the EBA’s clarifications on reporting requirements linked to the trading/non-trading book boundary and internal risk transfers to determine whether current templates, data points, and governance need adjustment ahead of the Delegated Act’s entry into force.
• Institutions participating in the EBA supervisory benchmarking exercise should consider reviewing the clarified treatment of institutions in that exercise under the revised FRTB framework, and ensure their benchmarking submissions and internal controls are aligned with the EBA’s technical considerations.
• Legal and regulatory policy teams may wish to monitor the scrutiny process of the 3rd FRTB Delegated Act by the European Parliament and Council, as the practical relevance of the no-action letter and technical considerations is contingent on the Delegated Act entering into force as adopted on 2026-06-04.

What changed

The EBA has formally issued a no-action letter recommending that competent authorities do not prioritise supervisory or enforcement action regarding provisions of the FRTB framework that govern: (i) the boundary between the banking book and the trading book; (ii) internal risk transfers between these books; and (iii) certain related reporting requirements, during the transition to the revised market risk regime.