SRB MREL Early Redemption Approval: New One-Month Route

ByOfficer

Last updated: June 2026

If a bank wants to call a senior non-preferred note before its contractual maturity, the treasury desk has the cash ready, the replacement issue priced, and one thing standing in the way: a permission from the Single Resolution Board. Get the timing of that permission wrong and the whole liability-management exercise slips a quarter. That is the part of MREL early redemption that has frustrated funding teams for years, and it is the part the SRB has just changed.

On 29 June 2026 the Single Resolution Board announced a faster procedure for approving early redemptions of MREL eligible liabilities instruments, the so-called prior permissions. Effective from 1 July 2026, the SRB commits to authorise eligible applications within a maximum of one month. For resolution-reporting and treasury teams inside the Banking Union, that is a planning change with real consequences for how you sequence buy-backs, calls, and refinancing.

This is a procedural change, not a rewrite of the underlying capital rules. The conditions for redeeming an eligible liabilities instrument early are exactly where they were. What moves is the clock. Below is what the new one-month route covers, what it does not touch, and the operational steps that decide whether your application lands in the fast lane or sits on the standard track.

Related reading: our guide to MREL prior permission and own-funds reduction.

What the SRB changed for MREL early redemption on 1 July 2026

The SRB’s announcement does one specific thing. It shortens the time the resolution authority takes to decide an eligible application to call, redeem, repay, or repurchase an MREL eligible liabilities instrument before its contractual maturity. From 1 July 2026, eligible applications are authorised within a maximum of one month, by an active decision from the SRB rather than by waiting out a deadline.

The SRB frames this as part of its simplification strategy and links it to its April 2026 response to the European Commission’s consultation on the competitiveness of the EU banking sector. SRB Chair Dominique Laboureix described it as a concrete and immediately useful simplification. The substance behind the soundbite matters more than the framing: a one-month commitment changes the calendar a funding team works to.

One narrow point that trips people up immediately. The one-month route is a service commitment by the SRB for eligible applications. It does not delete the underlying legal deadline, and it does not delete the advance-submission expectation. Banks still build the file, still submit ahead of the intended action, and still meet the substantive conditions. The change is that a clean, eligible application no longer has to ride the full standard clock to get its answer.

The legal basis: why the SRB, not the ECB, signs off

The permission regime for early redemption splits along a line that reporting teams have to keep straight. Under Article 77 of the Capital Requirements Regulation, as replaced by Regulation (EU) 2019/876, an institution needs prior permission before it reduces, calls, or redeems certain instruments ahead of maturity. Article 77(1) covers Common Equity Tier 1, Additional Tier 1, and Tier 2 own funds instruments, and that permission comes from the competent authority, meaning the ECB for significant institutions or the national competent authority. Article 77(2) is the resolution leg: it requires the prior permission of the resolution authority for eligible liabilities instruments that are not own funds, before their contractual maturity.

For banks under the SRB’s remit, the resolution authority is the SRB. That is why a senior non-preferred bond or a senior holdco note counted toward MREL goes to the SRB for permission, while an old-style Tier 2 call goes to the prudential supervisor. The conditions the SRB applies sit in Article 78a CRR, headed permission to reduce eligible liabilities instruments. Article 78a sets out when the resolution authority grants permission, including where the institution replaces the instrument with own funds or eligible liabilities of equal or higher quality on terms that are sustainable for the income capacity of the institution.

The Single Resolution Mechanism Regulation, Regulation (EU) 806/2014, is what makes the SRB the relevant resolution authority and the body that sets MREL for the banks it is responsible for. So the CRR provides the permission gate, and the SRMR provides the authority that operates it. The new one-month procedure is the SRB tuning how fast it walks through that gate, not a change to the gate itself.

The standard regime the fast track sits on top of

To see what the one-month route changes, you have to know the baseline. The detailed application mechanics live in the regulatory technical standards in Commission Delegated Regulation (EU) No 241/2014, as amended by Commission Delegated Regulation (EU) 2023/827, which applied from 9 May 2023. That amendment aligned the general prior permission regimes for own funds and for eligible liabilities so the two are handled coherently.

For the eligible-liabilities side, the timing rules live in Article 32g of the amended Delegated Regulation 241/2014. For a standard case-by-case prior permission, the institution must transmit a complete application to the resolution authority at least four months before the date on which the action will be announced to the holders of the instruments. One current scope point is important for SRB banks. The Daisy Chain Act amended the SRMR so that Article 77(2) and Article 78a CRR do not apply to liquidation entities for which the SRB has not determined an MREL requirement. From 14 November 2024, the SRB said it would repeal prior permissions granted to those entities, allowing them to reduce eligible liabilities instruments without SRB prior permission. Do not treat the old Article 32h tacit-approval route for loss-absorption-only entities as the current SRB process for those liquidation entities.

Here is the distinction the new announcement turns on. The standard case-by-case prior permission runs on a four-month window, the outer limit for the resolution authority to act. The SRB’s new commitment is to reach an active authorisation for eligible applications within one month. That four-month window does not disappear. What changes is that a well-prepared, eligible file should get a positive answer roughly three months sooner than the deadline allows, which is the difference between confidently pricing a replacement issue and waiting on a regulator.

Which applications are eligible for the one-month route

The word doing the heavy lifting in the SRB announcement is eligible. The one-month commitment attaches to eligible applications, and eligibility flows from the substantive conditions in Article 78a CRR plus a complete, well-evidenced file. An application that asks the SRB to chase missing documents or to resolve an open question about instrument quality is not the kind of application a one-month turnaround is built for.

In practice the cleanest cases are the replacement cases. Where the institution is calling an eligible liabilities instrument and replacing it, before or at the same time, with own funds or eligible liabilities of equal or higher quality on sustainable terms, the Article 78a condition is met on its face and the file is largely about evidencing the replacement. Cases that rely on headroom above the MREL requirement, or that involve a more finely balanced quality assessment, need more from the applicant and are more likely to use the full window.

The trap to avoid is treating eligible as automatic. The faster clock does not lower the substantive bar. A redemption that would leave the entity short of its MREL requirement, or that swaps a quality instrument for a weaker one, is not made acceptable by a quicker process. The SRB is committing to decide faster, not to approve more.

General prior permission: the predetermined-amount alternative

Case-by-case applications are one path. There is a second route that many treasury teams underuse, and it is worth weighing against the new one-month procedure rather than instead of it. Article 78a allows the resolution authority to grant a general prior permission to reduce eligible liabilities instruments up to a predetermined amount over a set period, the equivalent of the own-funds general prior permission. Delegated Regulation (EU) 2023/827 deliberately aligned the two regimes and put limits on the predetermined amount the resolution authority sets.

The operational catch sits in how that predetermined amount is treated. Under the aligned regime, once a general prior permission is granted, the predetermined amount is deducted from the moment the authorisation is given, not at the moment you actually redeem. That deduction reflects that the permitted amount can no longer be relied on to absorb losses. So a general prior permission buys flexibility and speed for routine buy-backs, at the cost of carrying the deduction across the whole permission period whether or not you use the full amount.

For a desk that runs frequent, small buy-backs, the general prior permission with its predetermined amount remains the cleaner tool. For a one-off call of a specific large instrument, the case-by-case route now answered within a month is often the better fit. The decision is a planning question, not a compliance one, and it is exactly the kind of thing to settle with your resolution team before the issuance window, not after.

What the change means for liability-management planning

The honest value of the one-month route is calendar certainty. For an early-redemption file, the first item to assemble is the replacement evidence the SRB will test under Article 78a: the terms of the new instrument, its ranking, and a clear statement that the swap is to equal or higher quality on sustainable terms. With a one-month commitment for eligible files, that preparation can be sequenced against a known issuance date rather than against a regulator’s worst-case deadline.

Build the timeline backwards from the action date. The instrument is called or redeemed on a contractual or optional call date. The permission must be in hand before that date. Submit the complete application with enough lead time that the one-month decision lands comfortably ahead of the call notice you owe bondholders. The faster decision narrows the gap between application and certainty, but it does not remove the need to submit in advance, and it does not change the contractual notice you have to give holders.

One operational habit that pays off here: keep the resolution-permission timeline and the capital-instrument call timeline on the same project plan. A surprising number of slipped redemptions trace back to teams treating the SRB permission as a formality that runs in parallel, then discovering the file was incomplete. A one-month service level rewards teams that submit clean and punishes teams that submit early but messy.

Where teams get this wrong

The first and most common error is mixing up the two permission tracks. An Additional Tier 1 or Tier 2 own-funds call goes to the competent authority under Article 77(1) and Article 78 CRR. An MREL eligible liabilities call that is not an own-funds instrument goes to the SRB under Article 77(2) and Article 78a. The new one-month procedure is an SRB commitment, so it applies to the eligible-liabilities leg. Do not assume the same speed for an own-funds call decided by the ECB or your national supervisor.

The second error is reading the one-month route as the removal of the advance-submission requirements. The standard case-by-case prior permission under Delegated Regulation (EU) 2023/827 requires submission at least four months before the action is announced to holders (Article 32g(1)). The SRB has layered a faster service commitment on top of that structure for eligible files. Planning a redemption on the assumption that the advance-submission expectation has gone is how a fast process produces a late permission.

The third error shows up after the redemption, in the returns. When an eligible liabilities instrument is redeemed, it stops counting toward MREL, and the next set of MREL reporting templates has to reflect that. Under a general prior permission, the predetermined amount comes out from the moment the permission is granted, so a team that keeps counting the permitted amount as available will overstate its eligible liabilities. Reconcile the redeemed or pre-authorised amount against your MREL position before the return goes out, not after a validation error bounces it back.

How this fits the SRB’s wider simplification push

The one-month procedure is a small piece of a larger pattern. The SRB has been signalling, including in its response to the EC competitiveness consultation, that it wants to reduce administrative friction in resolution processes without weakening the framework. Faster prior permissions sit alongside its work on resolvability and on liquidity in resolution, covered in the SRB’s liquidity and funding in resolution guidance.

It also lands against the backdrop of the broader Crisis Management and Deposit Insurance reform, which reshapes parts of the resolution and MREL regime over the coming years. For teams tracking that reform, our coverage of the CMDI package and its implementation timeline sets out what changes and when. The early-redemption procedure is independent of CMDI, but the two share a direction: a resolution framework that asks banks to hold loss-absorbing capacity while making the machinery around that capacity less of a drag on day-to-day funding.

The practical read for reporting officers is simple. The substance of MREL has not loosened. The benchmark requirements, visible in the EBA’s resolution reporting data, remain demanding. What has improved is the responsiveness of one specific gate, and teams that prepare for it properly will feel the benefit in their issuance calendars.

Frequently Asked Questions

When does the new SRB one-month procedure take effect?

The SRB announced the procedure on 29 June 2026 and it is effective from 1 July 2026. From that date, the SRB commits to authorise eligible applications for early redemption of MREL eligible liabilities instruments within a maximum of one month.

Does the one-month route replace the advance submission requirements?

No. The submission-timing rules under Commission Delegated Regulation (EU) 2023/827 remain the baseline for standard applications. For a standard case-by-case prior permission, the institution must submit at least four months before the action is announced to holders (Article 32g(1)). The one-month commitment is a faster SRB processing commitment for eligible, complete applications within that framework. For SRB liquidation entities where the SRB has not determined an MREL requirement, Article 77(2) and Article 78a CRR do not apply from 14 November 2024, so the point is no longer a deemed-approval process but a scope exclusion.

Which instruments does the procedure cover?

It covers the early call, redemption, repayment, or repurchase of MREL eligible liabilities instruments subject to prior permission under Article 77(2) and Article 78a of the CRR, before their contractual maturity.

Do own-funds calls go to the SRB under this procedure?

No. Reductions or calls of Common Equity Tier 1, Additional Tier 1, and Tier 2 own funds instruments need the competent authority’s permission under Article 77(1) and Article 78 CRR, meaning the ECB or the national competent authority. The SRB’s one-month commitment applies to the eligible-liabilities leg under Article 77(2) and Article 78a.

What makes an application eligible for the faster decision?

Eligibility rests on the substantive conditions in Article 78a CRR and on a complete, well-evidenced file. The cleanest cases are replacement cases, where the redeemed instrument is replaced by own funds or eligible liabilities of equal or higher quality on sustainable terms. Incomplete files or finely balanced quality questions are more likely to use the full window.

How far in advance should we still submit?

For a standard case-by-case prior permission, the regulatory technical standards require submission at least four months before the date on which the action will be announced to the holders of the instruments (Article 32g(1) of the amended Delegated Regulation 241/2014). The one-month commitment shortens the decision time, not the required lead time. Submit early enough that the decision lands before any contractual call notice is due to holders.

How does a redemption affect our MREL and capital returns?

A redeemed eligible liabilities instrument stops counting toward MREL, so the next MREL reporting templates must reflect the reduced amount. Under a general prior permission, the predetermined amount is deducted from the moment the permission is granted. Reconcile the position before submission to avoid overstating eligible liabilities.

Is the general prior permission still available as an alternative?

Yes. Article 78a allows the resolution authority to grant a general prior permission to reduce eligible liabilities up to a predetermined amount over a set period. It suits frequent small buy-backs, with the trade-off that the predetermined amount is deducted for the whole permission period. The new one-month case-by-case route often suits one-off calls of specific instruments.

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Key Takeaways

  • From 1 July 2026 the SRB commits to authorise eligible applications for early redemption of MREL eligible liabilities instruments within a maximum of one month, announced on 29 June 2026.
  • The change is procedural. The substantive conditions in Article 78a CRR for redeeming an eligible liabilities instrument early are unchanged.
  • The standard case-by-case prior permission under Commission Delegated Regulation (EU) 2023/827, applied from 9 May 2023, requires submission at least four months before the action is announced to holders (Article 32g(1)); advance submission is still required.
  • Eligible-liabilities calls go to the SRB under Article 77(2) and Article 78a CRR. Own-funds calls go to the competent authority under Article 77(1) and Article 78.
  • The cleanest eligible files are replacement cases, where the instrument is replaced by own funds or eligible liabilities of equal or higher quality on sustainable terms.
  • A general prior permission for a predetermined amount remains available, but the predetermined amount is deducted from the moment the permission is granted.
  • After a redemption, the instrument stops counting toward MREL. Reconcile the MREL reporting position before the next return to avoid overstating eligible liabilities.

Sources and References

Plan the file, not just the call

The one-month route is a genuine improvement, and it rewards the teams that were already disciplined. The SRB has told the market it will move faster on eligible early-redemption applications. The thing within your control is whether the application is eligible: complete, evidenced against Article 78a, submitted with sensible lead time, and reconciled into the MREL return on the other side. Treat the permission as a planned deliverable on the issuance project, and the faster clock turns into real certainty rather than a missed opportunity.

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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