CRR Prior Permission: The Four-Month Deadline Stays

ByRegReportingDesk

On 9 September 2026 the European Banking Authority confirmed that the European Commission had declined to endorse its draft technical standards to shorten the prior permission window for reducing own funds and eligible liabilities instruments. For capital and resolution teams, that confirmation carries one practical instruction: keep timing calls, redemptions and buybacks around the existing four-month application deadline.

The draft Regulatory Technical Standards, submitted on 19 March 2026, would have amended Commission Delegated Regulation (EU) No 241/2014 to speed up the processing of prior permission applications under Articles 78 and 78a of the Capital Requirements Regulation. The Commission set out its refusal in a letter dated 20 July 2026. The EBA replied on 8 September 2026 that it will not resubmit a revised draft, and will instead fold the timing change into a wider review of the same Delegated Regulation.

Any institution that had pencilled a faster approval path into a 2026 or 2027 liability-management plan now reverts to the timetable that has applied since the current RTS took effect. Nothing in the reporting templates changes. What changes is that the lead time you were hoping to trim stays where it was.

Related reading: our guide to the prior permission regime for own funds and MREL reductions.

The dates on this file

  • 19 March 2026: the EBA submits its draft amending RTS to the Commission.
  • 20 July 2026: the Commission informs the EBA it will not endorse the draft RTS.
  • 8 September 2026: the EBA replies, confirming it will not resubmit a revised draft.
  • 9 September 2026: the EBA publishes the exchange and its response.
  • Standing rule: a complete application is due at least four months before the action; a general prior permission renewal is due at least three months before the current permission expires.

The authorisation behind a redemption

Article 77 of the Capital Requirements Regulation stops an institution from calling, redeeming, repaying or repurchasing its own funds instruments (Article 77(1)) or its eligible liabilities instruments, meaning the debt that counts toward MREL (Article 77(2)), without prior permission. Article 78 routes the own funds permission to the competent authority. Article 78a, inserted by CRR2 (Regulation (EU) 2019/876), routes the eligible liabilities permission to the resolution authority, which acts after consulting the competent authority. Delegated Regulation (EU) No 241/2014, as amended by Delegated Regulation (EU) 2023/827, sets the procedure and the timing that sit under both.

The point teams miss is that prior permission is an authorisation you must already hold before you act, not a return you file after the fact. A treasury desk that books a redemption as a reporting event has usually lost the four months it needed to clear the approval.

The regime does offer a lighter track. Under Article 78(1) a competent authority may grant a general prior permission for a predetermined amount over a period of no more than one year. For Common Equity Tier 1 the predetermined amount is capped at 3% of the relevant issue and 10% of the headroom by which CET1 exceeds its requirements; for Additional Tier 1 and Tier 2 it is capped at 10% of the relevant issue and 3% of the total outstanding. Above those caps, a firm is back to a case-by-case application.

The four-month prior permission window the amendment would have cut

The standing rule requires a complete application, carrying the information the RTS specifies, at least four months before the action is announced to holders for an ordinary permission, or carried out for a general prior permission. A renewal of a general prior permission that has not yet expired is due at least three months before it lapses. The EBA describes this four-month timeframe as in force since 2021 and as one that supervisors and institutions alike consider too long. Its draft RTS aimed at the timing only and left the substantive permission tests alone.

Faster handling by an authority does not shorten the deadline on its own. The EBA makes the same point in its letter: even where competent and resolution authorities can process applications more quickly, without the amendment institutions still have to file within the four-month limit set by Delegated Regulation (EU) No 241/2014. The RTS does let authorities accept a shorter timeframe on a case-by-case basis under exceptional circumstances, but that is a discretion the authority chooses to exercise, and a filer cannot assume it.

Own funds and eligible liabilities move on the same timetable

The refused amendment covered both regimes in one instrument, which matters for anyone who runs capital management and MREL on separate tracks. Article 78 for own funds and Article 78a for eligible liabilities share standardised processes under the RTS, and both carry the four-month clock. For an eligible liabilities action the application goes to the resolution authority; for banks in the Banking Union that is usually the Single Resolution Board, acting after it consults the competent authority. If you are already mapping the SRB’s push for faster approval of early MREL redemptions, this is the file that decides whether that push has a legal hook yet.

Holding a general prior permission does not retire the planning problem. The predetermined amount and the one-year limit cap what you can call inside a granted permission before a fresh application is needed, and the same instruments feed your MREL reporting. A granted permission still has an amount and an expiry to manage.

Why the Commission held back, and the review it points to

The objection, as the EBA frames it, was the administrative burden of running the full amendment process for a targeted timing change. Rather than reopen that file, the EBA will pursue a broader review of Delegated Regulation (EU) No 241/2014 aimed at further efficiency gains, and says it has put governance arrangements in place for structured involvement of competent and resolution authorities. The appetite for a lighter process predates this file; the SRB has argued the same case in its response to the EU banking competitiveness consultation.

I read the EBA’s wording as deferral: the shorter window is folded into a bigger project and kept on the agenda. For planning purposes, though, that distinction does not help. The review carries no date, no draft and no application deadline of its own, and until any future amendment applies, the four-month rule is the operative rule.

Frequently Asked Questions

Can the case-by-case shortening in the RTS give us a reliable way to beat four months?

No. The RTS lets competent and resolution authorities accept a shorter timeframe only on a case-by-case basis and only in exceptional circumstances. It is the authority’s discretion to grant, so it cannot anchor a base-case redemption timetable.

We already hold a general prior permission. Is there still a deadline to watch?

Yes. A general prior permission runs for no more than one year, so a renewal application is due at least three months before it expires. The predetermined amount also caps how much you can retire under it before you need a new permission.

Does the non-adoption change anything in our COREP own funds or MREL returns?

No. This file changes authorisation timing, and leaves the reporting templates alone. The datapoints and remittance dates for your own funds and MREL returns are unaffected. The only thing that moves is the lead time before a capital or liability reduction.

Should we hold a planned 2027 liability-management action for the broader review?

The EBA has set no date for any further amendment. A planned action should be timed against the current four-month deadline, not against an expected future shortening that has neither a draft nor a schedule.

Key Takeaways

  • The four-month prior permission application deadline in Delegated Regulation (EU) No 241/2014 stays in force; the shorter window the EBA proposed was not adopted.
  • Own funds actions run through Article 78 to the competent authority; eligible liabilities actions run through Article 78a to the resolution authority. Both sit on the same four-month clock.
  • A general prior permission expires within one year and is capped at a predetermined amount; renewals are due at least three months before expiry.
  • The case-by-case shortening in the RTS is discretionary and should not sit in a base-case plan.
  • The EBA will not resubmit the targeted RTS; any change now depends on a broader review of Delegated Regulation (EU) No 241/2014 that carries no date.
  • Time any 2026 or 2027 call, redemption or buyback against a four-month lead, and build the resolution authority consultation into eligible liabilities plans.

Sources and References

What to hold in your capital calendar

The refusal leaves the framework exactly where it was, so the maintenance task is short. Confirm that every planned own funds or eligible liabilities reduction in the next two years is timed against a four-month application lead, check the expiry and predetermined amount on any general prior permission you rely on, and set the resolution authority consultation into your eligible liabilities plans. There is no shorter window to design around yet, and no dated review to wait for.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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