Regulatory Watch
NFC continuously monitors the regulatory landscape and supports banks and credit market companies by analysing regulatory developments that affect their business. Below is an extract of the main banking regulatory news from the past quarter.
Top 3 Banking Regulatory News for Q3 2025
- EBA consults on revised guidelines on internal governance and control
The EBA has published a proposal to update the Guidelines on internal governance and control (EBA/GL/2021/05) to reflect the changes introduced by CRD 6. They specify the additional requirements under Article 88(3) of CRD 6 to ensure that each member of the board of directors, executive management and key function holders have a documented description of their role and duties, and that a mapping of these has been established. They also provide guidance to ensure that third-country branches have a robust governance framework in place. The proposal also includes updates to harmonise with the DORA regulation and to take into account the outcome of the EBA benchmarking report on diversity practices and gender-neutral remuneration policies. It also takes into account lessons learnt from supervisory practices across the EU. The consultation will run until 7 November 2025.
Read more: https://www.eba.europa.eu/publications-and-media/press-releases/eba-consults-revised-guidelines-internal-governance
- EBA publishes its final regulatory technical standards (RTS) on conversion factors for off-balance sheet items
Under the Standardised Approach for credit risk, the exposure value of an off-balance sheet exposure is calculated as the nominal value of the item multiplied by a conversion factor in accordance with the table in Annex I to the CRR. With the published RTS, the EBA introduces allocation criteria for off-balance sheet items not included in this table. The assignment criteria aim to distinguish between different levels of probability of conversion, by evaluating the existence of financial covenants, conditions related to non-credit related events and the debtor's option to utilise or not to utilise the item. The EBA has also published a non-exhaustive list of examples to support institutions in classifying their items. The RTS also introduces four factors to be considered as limiting institutions' ability to cancel an unconditionally cancellable commitment. These factors relate to risk management processes, commercial considerations and reputational and litigation risks. The technical standards will be applicable 20 days after their publication in the Official Journal of the EU.
Read more: https://www.eba.europa.eu/publications-and-media/press-releases/eba-publishes-its-final-standards-balance-sheet-items-conversion-factors
- EBA launches consultation on its draft guidelines on third-party risk management for non-ICT services
The EBA has launched a public consultation on the draft guidelines on sound third-party risk management. The draft focuses on third-party arrangements related to non-ICT services provided by external service providers and their subcontractors, with a particular focus on the delivery of critical or essential functions. These guidelines revise and update the previous 2019 EBA guidelines on outsourcing (EBA/GL/2019/02), to harmonise with the Digital Operational Resilience Regulation (DORA). The draft guidelines specify the steps that financial institutions should take throughout the lifecycle of third-party arrangements to ensure that the rules are as consistent as possible with the requirements of the DORA framework. The draft also includes specific criteria for the application of the principle of proportionality. The guidelines also ensure consistency with the DORA register by allowing financial firms to store uniform information for both ICT and non-ICT services, including the possibility to use a common register. To ensure a smooth and efficient transition, financial firms covered by the updated guidelines will have a transitional period of two years to review and amend their existing third-party arrangements (TPAs) and update the register for non-ICT TPAs. The consultation will run until 8 October 2025.
Read more: https://www.eba.europa.eu/publications-and-media/press-releases/eba-launches-consultation-its-draft-guidelines-third-party-risk-management-regard-non-ict-related
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