BACKGROUND

On 3 August 2026, the European Supervisory Authorities (ESAs) published a Final Report containing draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2016/2251 regarding initial margin requirements for non-centrally cleared OTC derivatives. The Delegated Regulation supplements EMIR by specifying risk-management procedures for the exchange of collateral, including collateral levels, eligible collateral and segregation arrangements. The amendments concern counterparties whose aggregate month-end average notional amount (AANA) of non-centrally cleared OTC derivatives falls below EUR 8 billion.

WHAT'S NEW?

Extension of the initial margin derogation

The draft RTS extend the existing initial margin derogation to outstanding contracts. Currently, where one counterparty falls below the EUR 8 billion threshold, the derogation applies only to new OTC derivative contracts entered into during the relevant calendar year.

Where either counterparty has an AANA below EUR 8 billion for March, April and May of a given year, initial margins would no longer be collected for non-centrally cleared OTC derivative contracts between them. Initial margins already collected for outstanding contracts would also be released.

Application timeline and AANA calculation

Counterparties could apply the exemption from 1 June of the relevant year. They could nevertheless continue collecting initial margins or implement the exemption at a later date.

Where both counterparties exceed the threshold, initial margin requirements would apply to new contracts no later than 1 January of the following year. The AANA would continue to be calculated at counterparty level or, where the counterparty belongs to a group, at group level.

Treatment of equity options

The draft RTS also remove outdated transitional provisions concerning single-stock options and equity-index options. These instruments remain exempt from margin requirements under Article 11(3a) EMIR.

WHAT'S NEXT?

The ESAs have submitted the draft RTS to the European Commission for endorsement as a Delegated Regulation. Following endorsement, the text will be subject to non-objection by the European Parliament and the Council before publication in the Official Journal. The Regulation will enter into force 20 days after its publication and will be directly applicable in all EU Member States.

BACKGROUND

On 17 August 2026, the European Commission published Commission Delegated Regulation (EU) 2026/1000, adopted on 5 May 2026, specifying the methodology and payment arrangements for fees charged by the European Banking Authority (EBA) for validating pro forma initial-margin models under EMIR. The validation requirement was introduced by Regulation (EU) 2024/2987 (EMIR 3). The Regulation applies to counterparties using, or applying to use, pro forma models for non-centrally cleared OTC derivatives that are subject to EBA validation.

WHAT'S NEW?

Principles for determining annual fees

Annual fees must be based on full cost recovery and the counterparties’ average notional amount. The EBA must consider the direct and indirect costs associated with model validation, supporting statistical and IT tools, fee calculation and collection, and other validation-related activities.

Calculation of the average notional amount

Counterparties must calculate their average notional amount by averaging the monthly notional amounts of derivatives using the relevant model over the applicable reference period. The equivalent portfolio notional method applies by default, although alternative methods may be used where the counterparty can justify its choice to the competent authority.

Counterparties with a 12-month average notional amount below EUR 3,000 billion may use specified regulatory-threshold estimates, provided they can demonstrate that their actual notional amount is lower than the selected amount.

Fee methodologies

The Regulation establishes separate fee methodologies for:

• models validated as of 1 January of a given year;
• models already used before 24 December 2024; and
• new models not used before that date, for which up to EUR 500,000 may be allocated among the relevant counterparties.

Information requirements

Counterparties must provide the EBA annually with the average notional amount and other information required to calculate and invoice the applicable fees.

WHAT'S NEXT?

The Regulation enters into force on 6 September 2026 and is directly applicable in all Member States. Following the EBA readiness date, counterparties must generally submit fee-calculation information by 31 March each year. The EBA must issue invoices for the readiness year by 31 October. Fees are payable in euro within 45 calendar days of registration of the amount receivable in the EBA’s accounts.

On 3 August 2026, the European Banking Authority (EBA) published a No Action Letter on the boundary between trading book and banking book, and on the internal risk transfer between books and accompanying EBA considerations on the application of the FRTB from 1 January 2027, which support the implementation of the revised market risk framework under the Fundamental Review of the Trading Book (FRTB).

The publications address implementation issues arising from the European Commission's third Delegated Act on FRTB, adopted on 4 June 2026 and currently under scrutiny by the European Parliament and Council. The Delegated Act modifies the calculation of own funds requirements for market risk from 1 January 2027 until 31 December 2029 and introduces targeted operational relief measures and multipliers intended to preserve an international level playing field.

In the no-action letter, the EBA recommends that competent authorities do not prioritise supervisory or enforcement action regarding the FRTB boundary framework, including provisions governing the allocation of instruments between the banking book and trading book, internal risk transfers, and related reporting requirements. The recommendation would apply until 31 December 2029 or until legislative amendments providing legal certainty become effective.

The EBA notes that institutions applying the multiplier introduced by the Delegated Act would otherwise face operational complexity from maintaining parallel boundary frameworks. To ensure a level playing field, the EBA considers that both multiplier and non-multiplier institutions should be allowed to continue using the pre-FRTB ("CRR2") boundary framework for market risk calculations during the transitional period.

The technical considerations document provides clarification on eligibility and notification requirements for institutions wishing to apply the overall multiplier, treatment of market risk calculations under the output floor, structural foreign exchange positions, disclosure obligations, supervisory reporting expectations, and implications for supervisory benchmarking exercises. Institutions eligible for the multiplier must assess eligibility based on the 31 March 2027 reference date and notify competent authorities accordingly.

The measures become relevant only if and when the Commission Delegated Act enters into force. The EBA also indicates that further regulatory clarifications and amendments to reporting requirements may follow.

On 12 August 2026, the European Central Bank (ECB) published “Timely remediation for more resilient banks”, which outlines enhancements to the ECB Banking Supervision approach for managing supervisory findings and remediation measures, with the objective of making supervision more risk-based, efficient and proportionate while maintaining banking sector resilience.

The publication explains the ECB’s revised approach to the lifecycle of supervisory findings and measures. Supervisors identify prudential weaknesses, communicate expectations and measures to banks, and monitor remediation. Banks remain responsible for addressing findings in a timely manner, while supervisors may escalate unresolved issues through binding requirements or enforcement measures where necessary.

The ECB highlights the implementation in 2025 of a tiered approach for findings and measures. For low-severity findings, banks may close measures once actions have been taken, without additional supervisory scrutiny, and are no longer required to provide supporting documentation. The ECB states that this has enabled both banks and supervisors to focus resources on the most material risks.

The ECB plans to launch a refocusing exercise in October 2026 to review the stock of open findings and measures. The review will assess measures based on severity, age, prudential relevance, remediation status and the likelihood of requiring further supervisory intervention. The exercise may result in the discontinuation or simplification of follow-up for findings with limited prudential relevance and increased focus on issues with the greatest prudential impact. Additional simplifications will include reduced requirements for low-severity internal model findings and a more selective creation of low-severity measures.

The ECB will monitor the effects of the refocusing exercise and provide further updates to both the industry and individual banks in the coming months.

On 14 August 2026, the Official Journal of the European Union published European Central Bank Decision (EU) 2026/1942 (ECB/2026/18) on the processing of personal data in the context of the prudential supervision of credit institutions. The Decision establishes how responsibilities are allocated between the ECB and national competent authorities (NCAs) when they process personal data in the exercise of supervisory tasks within the Single Supervisory Mechanism (SSM).

The Decision establishes the framework under which the ECB and NCAs act as joint controllers for personal data processing carried out in supervisory activities, including fit and proper assessments, authorisation procedures, ongoing supervision, enforcement and sanctions, on-site inspections, oversight of less significant institutions, and supervision of less significant institutions.

The Decision allocates responsibilities for providing information to data subjects, handling data subject requests, managing personal data breaches, conducting data protection impact assessments, maintaining records of processing, and ensuring compliance with Regulation (EU) 2018/1725 and Regulation (EU) 2016/679 (GDPR).

The annexes define, for each supervisory activity, the purposes of processing, legal basis, categories of data subjects, and categories of personal data that may be processed. The Decision also establishes cooperation arrangements between joint controllers and mechanisms for resolving disputes relating to liability and compensation.

The Decision takes effect on the day of its notification to the addressees, namely the national competent authorities of participating Member States, and the ECB Governing Council will review the arrangements no later than five years after the Decision takes effect.

On 13 August 2026, the European Commission published Regulation (EU) 2026/1061, which amends Delegated Regulation (EU) 2019/980 regarding the standardised format and sequence, streamlined content, scrutiny and approval of prospectuses.

The Regulation applies to prospectuses published under Regulation (EU) 2017/1129 for securities offered to the public or admitted to trading on a regulated market in the European Union. It amends disclosure, format, approval and scrutiny requirements for equity and non-equity prospectuses and is directly applicable in all Member States.

The Regulation streamlines prospectus requirements by reducing the number of disclosure schedules and introducing a single registration document and a single securities note for non-equity securities, replacing separate retail and wholesale frameworks. It also introduces standardised prospectus formats for equity and non-equity securities and creates a new category of EU IPO prospectus for first-time admissions of shares to trading on a regulated market.

The Regulation establishes additional disclosure requirements for non-equity securities advertised as taking into account ESG factors or pursuing ESG objectives through a dedicated new Annex 23. It also enables competent authorities, in consultation with issuers, offerors or persons seeking admission to trading, to determine appropriate disclosure requirements for securities, issuers or transactions not covered by existing annexes.

The Regulation further introduces new timelines for prospectus approval procedures. Competent authorities may impose deadlines for revised submissions and must generally decide whether to approve a prospectus within 90 working days of the initial application, or 100 working days for SMEs, subject to limited extensions.

The Regulation enters into force on the third day following its publication in the Official Journal of the European Union.

On 10 August 2026, the European Securities and Markets Authority (ESMA) published the Public Statement on Transitional Provisions under the BMR Review, which outlines the transitional arrangements applicable under the revised Benchmark Regulation (BMR), including the treatment of pending third-country benchmark administrator applications and upcoming changes to the ESMA benchmark register.

Benchmarks provided by third-country administrators that submitted an application for recognition or endorsement to ESMA by 31 December 2025 may continue to be used in the EU until ESMA reaches a decision on the application. The statement includes a list of applications for which ESMA's decision remains pending as of the publication date.

Administrators already authorised, registered, recognised or endorsing under the BMR will retain their status until 30 September 2026 and are not required to re-apply if they fall within the scope of the revised BMR by that date. Benchmarks that fall outside the scope of the revised BMR but were provided by administrators authorised, registered, recognised or endorsing before 1 January 2026 may continue to be used in the Union after 30 September 2026.

The statement clarifies which benchmarks remain within the scope of the revised BMR, including critical benchmarks, significant benchmarks, opted-in benchmarks, and certain EU climate, Paris-aligned, climate transition or commodity benchmarks meeting specified thresholds. ESMA also publishes a list of administrators expected to be removed from the register as of 1 October 2026 unless specified conditions are met.

The next key milestone identified in the statement is 30 September 2026, by which competent authorities or ESMA may designate benchmarks as significant and after which relevant register changes will take effect.

On 14 August 2026, ESMA published updated technical instructions for weekly position reporting in commodity derivatives and emission allowance derivatives under Article 58 of MiFID II, setting out the operational, reporting and data validation requirements applicable to reporting entities.

The new reporting framework becomes operational on 3 September 2026, from which date relevant market participants must submit weekly position reports using XML Schema v2.0 and the associated validation rules.

The instructions apply to market operators and investment firms operating trading venues where commodity derivatives and emission allowance derivatives are traded. Reports must be submitted on a weekly basis covering the Monday-Friday period, reflecting positions at the close of trading on Friday. Submission is made through the HUBEX system using the standardised ISO 20022 XML format.

Trading venues are required to submit reports where at least 20 position holders are present and, for physically settled commodity derivatives, where the additional open interest threshold is met. The reporting dataset includes venue identification, report and publication dates, derivative identifiers, report status, position metrics, open interest percentages and participant-category data. ESMA will perform both technical and business validation checks and will generate feedback files indicating acceptance or reporting errors requiring correction.

The next step is the implementation of XML Schema v2.0 and alignment of reporting processes with the technical requirements before the go-live date of 3 September 2026.