European Banking Authority issues final draft RTS shortening prior-permission applications to reduce own funds and eligible liabilities to three months

The European Banking Authority (EBA) published final draft amendments to its Regulatory Technical Standards on own funds and eligible liabilities to reduce the timeframe for competent and resolution authorities to assess institutions’ applications for prior permission to call, redeem, repay or repurchase own funds and eligible liabilities instruments from four months to three months. The change reverts the extension introduced in the 2021 RTS update, reflecting the EBA’s view that authorities now have sufficient experience to complete these assessments more efficiently. The draft amends Commission Delegated Regulation (EU) No 241/2014 to require institutions to submit complete applications at least three months before the relevant action is announced to holders or carried out, covering both ad hoc prior permissions and general prior permissions, including renewals. To support the shorter timeline for eligible liabilities permissions, the maximum consultation period between the competent authority and the resolution authority is reduced to two months, and the resolution authority’s proposed excess margin and the competent authority’s response timelines are shortened accordingly. The amendments also delete RTS provisions that set a simplified procedure for certain liquidation entities, following Directive (EU) 2024/1174, which removed the requirement for such entities to obtain prior permission from the resolution authority to reduce eligible liabilities instruments. Next, the draft RTS will be submitted to the European Commission for endorsement and then be subject to scrutiny by the European Parliament and the Council before publication in the Official Journal of the European Union. The EBA noted that its public consultation ran for three months and ended on 9 October 2025, with respondents supporting the move back to a three-month deadline.