EBA FRTB No-Action Letter: The 31 March 2027 Multiplier Eligibility Test

On 3 August 2026 the European Banking Authority published an EBA FRTB no-action letter (EBA/Op/2026/08) on the boundary between the trading book and the banking book, alongside a set of technical considerations on how EU banks should apply the market risk framework once the European Commission’s third FRTB Delegated Act takes effect. Both documents attach to a Delegated Act the Commission adopted on 4 June 2026 under Article 461a of the Capital Requirements Regulation (Regulation (EU) No 575/2013), which, on entry into force, will modify the calculation of own funds requirements for market risk from 1 January 2027 for a three-year period ending 31 December 2029.

The Delegated Act is under scrutiny by the European Parliament and the Council, and the EBA is explicit that its considerations become relevant only if and once that act enters into force. Both documents address the practical question every trading-book bank is now asking: when the FRTB approaches finally switch on, which version of the rules governs the boundary, which multiplier can be used to soften the capital increase, and what has to be reported in the meantime. For an institution considering the optional Article 495v overall multiplier, eligibility is determined by comparing the two market-risk own-funds calculations as of 31 March 2027. An institution that chooses the treatment must then notify its competent authority without delay and provide evidence that the eligibility condition is met.

Related reading: our guide to the CRR3 temporary market-risk multiplier.

The dates that drive the FRTB transition

The urgency here is calendar-driven; the operative dates tell most of the story.

• 4 June 2026: the Commission adopted the third FRTB Delegated Act under Article 461a CRR. It is under Parliament and Council scrutiny.
• 17 July 2026: a Commission Communication confirmed the intention to proceed with a legislative proposal in the first quarter of 2027; the EBA cites this in its no-action letter as supporting the proposed boundary measures.
• 3 August 2026: the EBA published the no-action letter (EBA/Op/2026/08) and its technical considerations on applying the FRTB from 1 January 2027.
• 1 January 2027: the date from which the Delegated Act, once in force, modifies the market risk own funds calculation. The Article 495v overall multiplier is available only from the first quarter of 2027.
• 31 March 2027: the reference date for the adverse-impact assessment that decides multiplier eligibility, and the point from which trading-book composition and reclassification reporting would otherwise start.
• 12 May 2027: the reporting remittance date for the 31 March 2027 reference period under Commission Implementing Regulation (EU) 2024/3117; a useful planning anchor for the notification sequence, with the Article 495v(3) notification obligation running on its own timing.
• Second half of 2027: the revised market risk reporting requirements are expected to apply, and the delayed 2027 market risk benchmarking exercise is expected to run.
• 31 December 2029: the end of the Delegated Act’s three-year window and the outer limit of the no-action relief.

What the FRTB no-action letter actually covers

The no-action letter is addressed to competent authorities, not to banks. In it, the EBA recommends that the authorities responsible for prudential supervision do not prioritise supervisory or enforcement action in relation to the FRTB boundary provisions and certain related reporting requirements, until the earlier of 31 December 2029 and the date a CRR amendment clarifies how the boundary rules apply. The legal hook is Article 9c(3) and (4) of the EBA Founding Regulation (Regulation (EU) No 1093/2010), which lets the EBA issue a no-action letter where the application of one legislative act may directly conflict with another and raises significant exceptional issues for the functioning of the market.

That framing matters for how a reporting team should read the document. A no-action letter is a statement of supervisory priority, so it does not waive a capital requirement, postpone the Delegated Act, or rewrite the CRR. The own funds treatment for market risk is fixed by the Delegated Act itself once it is in force; the letter addresses the risk that banks would otherwise be forced to run two conflicting versions of the boundary rules at the same time. The conflict the EBA identifies is real: the Delegated Act tells multiplier users to calibrate against Article 104 as it stood on 8 July 2024, while the live CRR text points at the fuller FRTB boundary, and reconciling the two inside a single institution would be operationally expensive.

The letter reaches three things. It covers the allocation of instruments to the trading and non-trading books and the reclassification of positions between them. It covers internal risk transfers between the two books. And it covers the supervisory reporting that describes the composition of the trading book and those reclassifications. It does not touch the capital numbers a bank produces, the multiplier mechanics, or the benchmarking mandate, all of which are dealt with in the separate technical considerations.

Why the boundary framework stays on the CRR2 rules

The Delegated Act inserts a new Article 495v into the CRR that lets an eligible bank apply an overall multiplier to its market risk own funds. Article 495v(8) then specifies that, when a bank determines those own funds, it applies the trading-book inclusion requirements of Article 104 as they stood in the version in force on 8 July 2024. Recital 18 of the Delegated Act gives the reason: to calibrate the multiplier precisely and to avoid the operational complexity of running multiple boundary concepts inside the same institution, including changes to the models built under the earlier Basel 2.5 framework.

Article 104 is only part of the picture. The EBA points out that the boundary framework is the combined effect of Articles 104, 104a, 106(2) to (7) and the second sentence of Article 325j(5), with Article 204a also in scope because it depends on how Article 106 is applied. Requiring a bank to apply Article 104 on the old basis but the newer FRTB versions of the surrounding provisions would fragment the boundary into two inconsistent sets of rules. To prevent that, the EBA reads the position as one where multiplier users work off the CRR2 boundary framework, meaning Articles 104 and 106 as they stood before the amendments made by Regulation (EU) 2019/876, that is, before 28 June 2023, not only when they calibrate the multiplier but when they calculate the capital the multiplier is applied to. This is the point most likely to be misread: the 8 July 2024 reference in Article 495v(8) is a calibration instruction, and treating it as the whole boundary rule for multiplier banks understates what actually has to be held constant.

The harder question was what happens to banks that do not use the multiplier. On its face, those institutions would have to apply the more prescriptive FRTB boundary, which would leave them under tighter constraints than multiplier users and create a level-playing-field problem inside the single market. The Commission’s own questions and answers accompanying the Delegated Act take the view that banks not using the multiplier should get the same flexibility, and the EBA follows that reading: a non-multiplier bank should also be allowed to base its market risk own funds on the CRR2 boundary framework. For a deeper treatment of how the FRTB boundary interacts with trading-book capital, see our explainer on the FRTB trading-book boundary and capital rules.

The Article 495v overall multiplier: eligibility and the notification you cannot miss

The overall multiplier exists to soften the capital jump for banks that lose out when they move from the current framework to the FRTB approaches. Eligibility turns on a single test, run at the 31 March 2027 reference date. Eligibility is determined at 31 March 2027 by comparing the institution’s market-risk own funds calculated under the CRR version in force on 9 July 2024, taking the transitional treatments in Articles 495i to 495t into account, with its market-risk own funds calculated under Part Three, Title IV, in the version in force on 8 July 2024. The multiplier is available only where the first amount is higher.

The mechanics carry several traps. Applying the multiplier is neither automatic nor mandatory: an institution that chooses the treatment must notify its competent authority without delay and provide evidence of eligibility under Article 495v(3). The EBA recommends that institutions expecting to be affected liaise with their supervisor early and submit the notification as soon as possible after the reference date. The quarterly remittance date for the 31 March 2027 reference date under Regulation (EU) 2024/3117 is 12 May 2027, a useful planning anchor; the Article 495v(3) notification obligation runs on its own separate timing. There is also no delayed entry: an eligible bank can only start applying the multiplier from the first quarter of 2027, so a bank that waits cannot pick it up in a later quarter.

Once switched on, the multiplier is recalibrated quarterly under Article 495v(5), which means a bank has to keep both the CRR2 and the FRTB calculation engines running for as long as it applies the multiplier. A bank that starts in March 2027 does not lose eligibility simply because the FRTB figure dips below the CRR2 figure at some later reference date, but it does have to keep producing both calculations, and it has to notify the authority under Article 495v(4) before it stops applying the multiplier. There is one consequence that is easy to overlook in the model-governance workstream: once the Delegated Act applies, an existing permission to use CRR2 internal models expires automatically, with no withdrawal request or approval, unless the bank is eligible for the multiplier and notifies the authority that it wants to keep using those models in that context.

The EBA recommends non-prioritisation of trading-book composition reporting

The reporting ITS, Commission Implementing Regulation (EU) 2024/3117, requires institutions to report information on the composition of the trading book and on reclassifications between the books, with those data points defined by reference to the FRTB boundary. Article 24(2) of that regulation sets the first reference date for this reporting as a date after the FRTB alternative approaches become applicable for the own funds calculation. Once the third FRTB Delegated Act applies, that condition is technically satisfied, which would put the first reference date at 31 March 2027.

The EBA closes that gap deliberately. Reporting on trading-book composition and reclassifications is built on the FRTB boundary, yet under the no-action letter banks are calculating their own funds on the CRR2 boundary. Forcing a bank to file complementary data against one version of the boundary while it capitalises against another would recreate the very fragmentation the letter is trying to prevent. So the EBA recommends that competent authorities not prioritise supervisory or enforcement action in relation to this reporting until the own funds calculation itself is based on the FRTB boundary, and it asks the Commission to revise Article 24(2) to line the reporting start date up with the capital start date. If the Delegated Regulation applies from 1 January 2027, Article 24(2) would make 31 March 2027 the first reference date under the current reporting ITS. The no-action letter is a recommendation about supervisory and enforcement priority, and the legal reporting obligation in the ITS persists pending its amendment. For the wider mapping of FRTB into supervisory returns, see our walkthrough of CRR3 FRTB market risk reporting.

Filling COREP while the amending ITS is still in consultation

The revised market risk reporting the EBA is preparing sits in the market risk module of its consultation paper EBA/CP/2026/07, which assessed the impact of the Delegated Act against the Commission’s November 2025 policy proposal and will be revised to reflect the final adopted act. Those revised requirements were consulted on in EBA/CP/2026/07, whose consultation period closed on 10 July 2026, and are not yet applicable; the EBA expects the revised market-risk reporting requirements to apply from the second half of 2027. Until they do, the technical considerations tell banks to reflect the framework that applies from 1 January 2027 inside the templates already in use, and the instructions differ depending on whether the multiplier is used.

A bank applying the Article 495v overall multiplier reports under both frameworks, as Article 495v(6) requires. It reports the CRR2 standardised approach numbers in templates C 18.00 to C 23.00 and the CRR2 internal-model numbers in C 24.00. It reports the FRTB alternative standardised approach in C 91.00, reflecting the Delegated Act’s relief measures but excluding the effect of the overall multiplier, and it reflects the separate Article 495s(1) SbM multiplier only in columns 0190 and 0200 of that template rather than scaling the sensitivities in the earlier columns. In C 02.00 it reports only the risk weighted exposure amount under CRR2, after the multiplier. A bank using the FRTB alternative internal model approach reflects the all-portfolio ASA figure from the Article 325ba(3) formula in C 91.00.

A bank that does not use the multiplier reports only under the FRTB framework. If it is on the alternative standardised approach or the alternative internal model approach it reports in C 91.00, again excluding the overall multiplier. If it is on the simplified standardised approach it reports in C 18.00 to C 23.00, reflecting both the Article 325(2) scaling factors and the Article 495s(2) targeted multiplier in the columns dedicated to the total risk exposure amount in C 18.00 and C 21.00 to C 23.00. If your team wants the underlying template mechanics, our COREP reporting explainer sets out how the market risk templates fit together.

The operational-risk and benchmarking knock-ons

The boundary choice reaches beyond market risk. Under the operational risk framework a bank can, where appropriate, use a prudential boundary approach to determine the financial component of the business indicator, and when it does it applies the same boundary definition it uses for market risk. That keeps the two frameworks aligned during the relief period, but it comes with a tail obligation: once the no-action letter ceases to apply, a bank that used the prudential boundary approach is expected to review the information on that use against the forthcoming regulatory technical standards and to resubmit the corresponding notification. Teams tracking the wider CRR3 operational risk build should read this alongside our note on CRR3 operational risk reporting.

The benchmarking mandate under Article 78 of the Capital Requirements Directive is affected too, and here the population of reporting banks changes shape. Banks that apply the Article 495v multiplier continue to use CRR2 internal models to calibrate it, so they stay within the Article 78 mandate and are expected to take part in the CRR2 internal-model part of the exercise, resuming the internal-model benchmarking that had been paused. Banks on the FRTB alternative standardised approach join the market risk benchmarking exercise from 2027. The FRTB alternative internal model approach data collection stays suspended until it is clearer how many European banks will actually adopt that approach. With alternative standardised approach banks now joining the scope, the benchmarking population will expand significantly, and the consultation proposes to push the timeline into the second half of 2027. The benchmarking ITS for the 2027 exercise is itself still in consultation and is expected to be finalised in autumn 2026, as our coverage of the 2027 market risk benchmarking consultation sets out.

Frequently Asked Questions

Does the no-action letter change how much capital we have to hold?

No. The letter is a recommendation to supervisors about enforcement priority on the boundary provisions and certain related reporting. The market risk own funds treatment is set by the Delegated Act once it is in force, not by the letter.

What happens if the Delegated Act is rejected during Parliament and Council scrutiny?

The letter and the technical considerations become relevant only if and once the Delegated Act enters into force. If it does not, neither set of measures applies, and the underlying CRR timeline governs instead.

We do not expect to be adversely impacted. Can we still stay on the CRR2 boundary?

Yes. The Commission’s questions and answers, which the EBA follows, extend the same flexibility to banks that do not use the multiplier, so a non-multiplier bank may also base its market risk own funds on the CRR2 boundary framework.

We hold a CRR2 internal-model permission but will not use the multiplier. What happens to that permission?

Once the Delegated Act applies, the permission expires automatically, without any withdrawal request or approval, unless the bank is eligible for the multiplier and notifies its authority that it wants to keep the model in that context.

Can we switch on the overall multiplier from a later quarter, such as Q3 2027?

No. An eligible bank can only start applying the multiplier from the first quarter of 2027. There is no later entry point, which is why the 31 March 2027 assessment and the notification timing matter.

Do we report anything on trading-book composition and reclassifications from 31 March 2027?

The Article 24(2) condition in the reporting ITS is technically met once the Delegated Act applies, but the EBA recommends that competent authorities not prioritise supervisory or enforcement action in relation to this reporting until own funds are calculated on the FRTB boundary, so those data points are not expected during the relief period. The legal reporting obligation in the ITS persists unless and until it is amended; the no-action letter is a recommendation on supervisory and enforcement priority.

If we use the prudential-boundary approach for operational risk, is anything required once the relief ends?

Yes. A bank that used the prudential boundary approach is expected to review the information on that use against the forthcoming regulatory technical standards and to resubmit the corresponding notification once the no-action letter ceases to apply.

Related Articles

• FRTB Market Risk Reporting and the CRR3 Temporary Multiplier: how the temporary multiplier softens the capital step-up when banks move to the FRTB approaches.
• CRR3 FRTB Market Risk Reporting: the COREP templates and reference dates for reporting market risk under the revised framework.
• EU Basel III Market Risk: FRTB Trading-Book Capital: how the trading-book boundary drives the scope of market risk capital.
• EBA 2027 Market Risk Benchmarking Consultation: what banks using internal models need to check before the benchmarking data collection.
• COREP Reporting Explained: the structure of the COREP templates and how the own funds returns fit together.
• CRR3 Operational Risk Reporting: the business indicator and the reporting build under the CRR3 operational risk framework.

Key Takeaways

• The no-action relief and technical considerations apply only if and once the third FRTB Delegated Act enters into force; both are pending Parliament and Council scrutiny.
• Assess adverse impact at the 31 March 2027 reference date; the Article 495v overall multiplier can only be switched on from the first quarter of 2027.
• An institution choosing the treatment must notify its competent authority without delay under Article 495v(3); 12 May 2027 is the quarterly reporting remittance date for the 31 March 2027 reference period, not the notification deadline.
• Multiplier users keep parallel CRR2 and FRTB calculation systems running for the quarterly recalibration under Article 495v(5) and report under both frameworks under Article 495v(6).
• Under the current wording of Regulation (EU) 2024/3117, the reporting condition would be met when the alternative market-risk approaches become applicable. The EBA no-action letter concerns supervisory and enforcement priority; the legal reporting requirement remains in the ITS unless and until that ITS is amended.
• Revised market risk COREP is expected from the second half of 2027; until then map the Delegated Act into C 18.00 to C 24.00, C 91.00 and C 02.00 per the EBA’s interim guidance.
• The 2027 market risk benchmarking exercise widens to include FRTB alternative standardised approach banks and is proposed to slip to the second half of 2027, while FRTB alternative internal model data collection stays suspended.
• The Delegated Act’s temporary measures run until 31 December 2029. The no-action recommendation is intended to cease on the earlier of 31 December 2029 and the application of a CRR amendment resolving the boundary issue. The Commission has signalled a legislative proposal for the first quarter of 2027.

Sources and References

• European Banking Authority, press release, “The EBA publishes a no-action letter and technical considerations to support the implementation of the market risk framework for EU banks”, 3 August 2026: eba.europa.eu
• EBA, Opinion in the form of a No Action Letter on the boundary between the trading book and banking book, and on the internal risk transfer between books (EBA/Op/2026/08), 3 August 2026: No Action Letter (PDF)
• EBA, Consideration on the application of the FRTB from 1 January 2027 (technical issues and supervisory benchmarking), 3 August 2026: EBA Technical Considerations (PDF)
• European Commission, “Questions and answers: Banking package: Amending market risk requirements to preserve the international level playing field, technical implications”: finance.ec.europa.eu
• Regulation (EU) No 575/2013 (Capital Requirements Regulation), consolidated text as at 26 June 2026, including Article 461a: EUR-Lex; and European Commission, Commission Delegated Regulation adopted on 4 June 2026 inserting Articles 495i to 495v if it enters into force: Commission Delegated Regulation
• Regulation (EU) 2024/1623 (CRR3), amending the CRR as regards market risk and the output floor: EUR-Lex
• Commission Implementing Regulation (EU) 2024/3117 of 29 November 2024 (ITS on supervisory reporting), Article 24(2): EUR-Lex
• EBA, Consultation Paper on amending the ITS on benchmarking of internal approaches for the 2027 market risk exercise (EBA/CP/2026/11): Consultation Paper (PDF)

Building the 31 March 2027 decision into the reporting calendar now

Nothing in the no-action letter has to be filed today, and nothing is due until the Delegated Act clears scrutiny and enters into force. That makes it tempting to park the whole file, and it is the wrong instinct, because the eligibility test runs off a fixed reference date that cannot be recreated later. A bank that has not stood up both the CRR2 and the FRTB calculation by 31 March 2027 cannot show whether the FRTB own funds exceed the CRR2 figure, and without that comparison it cannot support an Article 495v notification.

The concrete next step is to confirm, at the 31 March 2027 reference date, whether the FRTB market risk own funds exceed the CRR2 figure, and to file the Article 495v notification with the competent authority as soon as possible after that date; the 12 May 2027 remittance date for the 31 March 2027 reference period is a useful planning anchor but not the notification trigger. Everything else, the trading-book composition reporting under the no-action letter’s supervisory-priority recommendation, the interim COREP mapping, the benchmarking scope, follows from that single comparison.

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.