Investment Firm Reclassification: EBA’s EUR 30bn Threshold RTS

ByRegReportingDesk

On 25 August 2026 the European Banking Authority opened a three-month consultation on the mechanics of investment firm reclassification into credit institutions. Meeting an Article 8a(1) threshold triggers an application for credit institution authorisation; it does not itself complete the reclassification, and Article 8a(2) CRD permits the undertaking to continue the relevant activities until authorisation is obtained. The package contains three draft regulatory technical standards (RTS): one on how to calculate total assets against the EUR 30 billion threshold, one on how a firm reports that figure to its competent authority, and one, consulted on for the first time, on the factors a competent authority weighs when deciding whether to waive the duty to hold a credit institution licence. Comments are due by 25 November 2026.

Since the Investment Firms Regulation and Directive framework became applicable on 26 June 2021, a MiFID-authorised undertaking within point (1)(b) of Article 4(1) CRR must apply under Article 8a(1) CRD when either its average monthly total assets over 12 consecutive months are at least EUR 30 billion, or the 12-month group test in Article 8a(1)(b) is met. What changed is the perimeter. The 2024 banking package rewrote how those assets are counted, and the draft RTS translate that rewrite into a calculation method, a quarterly return, and a waiver test. For a firm sitting a few billion below the line, the number it has been watching may now move, and the reporting return it files may soon look different.

This is a consultation, so the templates, reference dates and waiver criteria described below are proposals. They bind no one until the European Commission adopts each RTS and it enters into force. The Level 1 thresholds, by contrast, apply today.

Related reading: the ICARA and additional own funds regime for investment firms

The consultation calendar that actually binds

Two sets of dates run through this file. One set is firm: the consultation window. The other set, the reporting reference and remittance dates, sits inside the draft RTS and is proposed, not enacted. Keep them apart.

  • 25 August 2026: the EBA launches the consultation on the three draft RTS.
  • 25 September 2026, 16:00 CEST: deadline to register for the public hearing.
  • 30 September 2026, 10:00 CEST: virtual public hearing.
  • 25 November 2026: deadline for written comments.
  • After the consultation closes, the EBA finalises the three draft RTS and submits them to the European Commission. No adoption date is fixed.

A firm that treats the draft remittance dates as live obligations for the next quarter would be reporting against a text that has not yet been adopted.

Three draft RTS behind investment firm reclassification

The consultation paper groups the work under three separate mandates, each pointing at a different provision. Reading them as one undifferentiated rule is the first mistake, because they answer different questions and carry different legal bases.

The first draft RTS specifies the methodology for calculating total assets against the threshold in point (1)(b) of Article 4(1) of the Capital Requirements Regulation, the definition that captures large dealing-on-own-account and underwriting firms. Its mandate is Article 8a(6)(b) of the Capital Requirements Directive. The second specifies what an investment firm reports so its competent authority can monitor the threshold on an ongoing basis, mandated by Article 55(5) of the Investment Firms Regulation. The third specifies the elements a competent authority considers before granting a waiver from credit institution authorisation, mandated by Article 8a(7) of the CRD and applying the waiver power in Article 8a(3a).

Only the first two of these have been consulted on before. The methodology RTS has already been through two rounds of public consultation, in June 2020 and June 2021, and was reworked after the first round to identify more precisely which entities enter the calculation and to remove distortions based on where a firm happens to be domiciled. The waiver RTS is genuinely new to consultation. That matters for how you read the responses: on methodology and reporting the EBA is refining a familiar text, while on the waiver it is asking the market to shape a test from a blank page.

The EUR 30 billion test, and why the perimeter narrowed

The reclassification duty lives in the definition of a credit institution. Point (1)(b) of Article 4(1) CRR treats an undertaking as a credit institution where it carries out activity (3), dealing on own account, or activity (6), underwriting of financial instruments or placing on a firm commitment basis, under Section A of Annex I to MiFID (Directive 2014/65/EU), and its total assets reach EUR 30 billion. Article 8a(1) CRD requires such a MiFID-authorised undertaking to apply no later than the day on which either the 12-month-average individual test in point (a) or the 12-month-average Union group test in point (b) is met.

Regulation (EU) 2024/1623, the CRR amendment in the 2024 banking package, replaced that definition. The individual limb now measures the total consolidated assets of the undertaking established in the Union, including any branches and subsidiaries it holds in a third country. The mandatory group limb in point (1)(b)(ii) aggregates the consolidated assets of undertakings in the group that are established in the Union and carry out activities (3) and (6), each individually below EUR 30 billion, and asks whether the combined figure reaches EUR 30 billion. Point (1)(b)(iii) separately retains a wider group-assets route that the consolidating supervisor may apply, after consulting the supervisory college, to address potential circumvention or risks to Union financial stability. As the consultation paper puts it, the relevant activities and the EU branches of third-country entities of the same group are included, as opposed to the global scope in the previous version of the CRD.

That is the change most likely to move a number. A group that cleared the old global-scope test may fall below the threshold on the revised EU-scoped perimeter. The perimeter narrowing, by itself, does not support the reverse conclusion. The revised definition also inserts a carve-out that did not exist before: an investment firm for which credit institution authorisation is waived under Article 8a of the CRD is expressly excluded from the definition. The waiver therefore does more than relieve a duty. It keeps the firm outside the legal category entirely.

One boundary is worth stating plainly, because size alone does not pull a firm in. The definition reaches only firms carrying out activity (3) or activity (6). A firm whose permissions cover reception and transmission of orders, execution for clients, or portfolio management, without dealing on own account or firm-commitment underwriting, stays outside this definition regardless of how large its balance sheet grows. The threshold is a filter on a specific activity set, applied to firms that already do those activities.

The EUR 5 billion Article 55 monitoring return and the draft RTS

Long before a firm reaches EUR 30 billion, a separate obligation switches on. Article 55(1) of the Investment Firms Regulation applies to investment firms carrying out MiFID Annex I, Section A activities (3) or (6): where the 12-month average of the firm’s consolidated assets is at least EUR 5 billion, the firm must verify total assets monthly and report that information quarterly to its competent authority. The EUR 5 billion threshold is a reporting trigger only. Conflating it with reclassification runs in both directions: crossing EUR 5 billion does not make a firm a bank, and a firm that only watches the EUR 30 billion line has already missed a reporting duty that started at one sixth of it.

The second draft RTS specifies what that return contains. It proposes two templates. Template I 10.01, verification of total assets at individual level and group test, carries the firm’s own total assets, its consolidated assets, the identity of the group’s ultimate parent, and the combined assets of relevant undertakings in the group, with a separate line for the assets of relevant third-country branches. Template I 10.02 breaks the group test down entity by entity. A firm that is not part of a group would complete only the first row of the first template.

Article 55 IFR already requires quarterly reporting. The draft RTS proposes the detailed reference-date, remittance, calculation and correction mechanics for that existing quarterly obligation. Those detailed mechanics remain proposals and take effect only if and when the Commission adopts the RTS and the adopted act enters into force.

The waiver: a licence duty a competent authority can switch off

Under Article 8a(3a) CRD, after receiving the Article 8a(1) authorisation application and a waiver request from the undertaking, the competent authority may waive the requirement to obtain credit institution authorisation. It must notify EBA; EBA has one month to issue an opinion; and the competent authority must take that opinion and the Level 1 factors into account. A granted waiver leaves the undertaking outside point (1)(b) of the CRR credit-institution definition and continuing under its investment-firm authorisation.

The Level 1 text already names the elements a decision rests on: where the undertaking is part of a group, the group’s organisational structure, its booking practices and the allocation of assets across group entities; the nature, size and complexity of the undertaking’s activities in its Member State and across the Union; and the importance of, and systemic risk posed by, those activities. Article 8a(7) mandates the EBA to specify how these are weighed, and to take account of the materiality of the counterparty credit risk the firm runs. In the draft, a competent authority would be expected to assess the group’s structure, booking practices and asset allocation, analyse the business model and the share of deals the firm executes on behalf of clients, draw on available regulatory instruments to measure systemic risk, and analyse the size and complexity of the firm’s derivatives portfolio and footprint.

The rationale sits in the EBA’s own class taxonomy. A class 1 minus undertaking is an investment firm applying the CRR under Article 1(2) or Article 1(5) IFR. Article 1(2) covers the EUR 15 billion individual limb, the EUR 15 billion group limb, and a competent-authority decision under Article 5 IFD for an eligible firm with 12-month average consolidated assets of at least EUR 5 billion; Article 1(5) is a separate permission for a qualifying subsidiary included in CRR consolidated supervision. Class 1 minus firms already apply the banking own funds rules of the CRR while staying under investment firm supervision. The waiver allows the competent authority, following the Article 8a(1) application and a waiver request, to decide that the undertaking need not obtain credit institution authorisation after taking the EBA opinion and the Level 1 factors into account. Where a waiver is granted, the undertaking is excluded from point (1)(b) of the CRR credit-institution definition.

What crossing the line changes on the reporting side

Reclassification changes the entire regulatory regime. Investment firms do not all remain under the same prudential regime: firms within Article 1(2) IFR, and firms permitted under Article 1(5), apply CRR prudential requirements, while other investment firms remain within the IFR/IFD framework subject to their classification. A credit institution reports on the CRR and CRD apparatus: COREP own funds and requirements, financial reporting, large exposures, liquidity, and the capital stack that includes the CRR3 output floor. The scoping calculation also reaches into territory covered by third-country branch rules under CRD VI, because the EU branches of third-country group entities feed the group test.

SSM significance must be assessed separately from Article 8a reclassification. Under Article 50 of Regulation (EU) No 468/2014 (SSM Framework Regulation), the size criterion is met where the supervised entity’s or supervised group’s total assets exceed EUR 30 billion, using the SSM Framework Regulation’s own asset basis, including year-end prudential consolidated reporting for a supervised group. Article 8a instead uses 12-month-average tests and can be triggered through its group limb while the individual undertaking remains below EUR 30 billion. Reclassification therefore does not by itself establish direct ECB supervision.

How to respond, and what to model before November

The EBA is consulting on the revised calculation and monitoring standards and, for the first time, on the new waiver RTS. A firm with an unusual group structure, a large third-country footprint, or a booking model that spreads dealing activity across several EU entities has a concrete interest in all three.

Ahead of a response, the work is a recalculation. Re-run the EUR 30 billion test on the EU-scoped perimeter and compare it against the figure produced under the old global scope, because the two can diverge. Confirm whether Article 55 IFR already requires the firm to verify assets monthly and report the required information quarterly; the harmonised EBA threshold-monitoring RTS and templates remain pending adoption and are not yet applicable. For any firm within reach of EUR 30 billion, map the two proposed templates against the data it already holds and identify the ultimate-parent and third-country-branch fields it may not currently capture. And where a firm sits near the line, the waiver factors are worth an early internal assessment, since a waiver keeps the firm under its existing authorisation and outside the credit institution category.

The scope change deserves a second look for a subtler reason. Because point (1)(b)(ii) uses the specified Union perimeter, changes in where relevant activity is booked can affect that calculation. Point (1)(b)(iii) applies where the undertaking itself is below EUR 30 billion and the consolidating supervisor, after consulting the supervisory college, applies the definition on the basis that the wider relevant group assets reach EUR 30 billion, to address potential circumvention or risks to Union financial stability. The EUR 30 billion group-asset floor applies here as under point (1)(b)(ii).

Frequently Asked Questions

Does crossing EUR 5 billion in assets mean my firm is about to be reclassified as a credit institution?

No. For an investment firm carrying out MiFID Annex I, Section A activity (3) or (6), EUR 5 billion is the Article 55(1) IFR threshold at which the 12-month average of consolidated assets triggers monthly asset verification and quarterly reporting to the competent authority. Reclassification is triggered at EUR 30 billion under Article 8a of the CRD. The reporting duty exists precisely so a firm is watched on the long approach to the higher line.

We only execute client orders and manage portfolios, with no dealing on own account or underwriting. Can our balance sheet size still make us a credit institution?

Not under this definition. Point (1)(b) of Article 4(1) CRR reaches only firms carrying out activity (3), dealing on own account, or activity (6), underwriting or placing on a firm commitment basis, under Section A of Annex I to MiFID. A firm without those permissions stays outside the definition regardless of total assets. Other prudential thresholds may still apply to it under the IFR.

Our ultimate parent sits outside the EU. Whose assets go into the group test now?

The revised definition counts the consolidated assets of undertakings established in the Union that carry out the relevant activities, including their own third-country branches and subsidiaries, plus the EU branches of relevant third-country group entities. The previous global scope no longer governs the mandatory point (1)(b)(ii) group limb; point (1)(b)(iii) separately retains a wider group-assets test subject to a decision by the consolidating supervisor. The proposed template captures this with a separate line for the assets of relevant third-country branches and fields identifying the ultimate parent.

If our competent authority grants a waiver, are we still treated as a credit institution?

No. The revised Article 4(1)(1)(b) CRR expressly excludes an investment firm for which credit institution authorisation is waived under Article 8a of the CRD. A granted waiver keeps the firm under its MiFID authorisation and outside point (1)(b) of the CRR credit-institution definition; the firm remains subject to the applicable investment-firm prudential regime.

What happens in the gap between breaching the threshold and receiving the credit institution authorisation?

Under Article 8a of the CRD as first inserted by the Investment Firms Directive, an undertaking that breaches a threshold must apply for authorisation, and may continue carrying out its activities until the authorisation is obtained. The calculation is based on a 12-month average of monthly total assets, so a single month above the line is not, by itself, the trigger.

Are the templates and reporting dates in the consultation final?

No. Article 55 IFR already requires quarterly reporting. The proposed templates and the specific reference and remittance dates are part of the draft RTS out for comment until 25 November 2026; those draft details take legal effect only after the EBA finalises the draft, the European Commission adopts the RTS as a delegated regulation, and the adopted regulation enters into force.

Is the EUR 30 billion reclassification threshold the same as the EUR 40 billion figure I have seen for third-country branches?

No, and they should not be mixed. The EUR 30 billion test governs reclassification of investment firms into credit institutions under Article 4(1)(1)(b) CRR and Article 8a CRD. CRD VI contains two separate EUR 40 billion provisions for third-country groups. Under Article 48undecies(2) CRD VI, where the aggregate EU assets of all third-country branches belonging to the same third-country group reach EUR 40 billion, the competent authority must assess the systemic importance of the branch it supervises. Under Article 21b CRD, where the total EU assets of the third-country group (counting both institutions and branches) reach EUR 40 billion, the group must establish an intermediate EU parent undertaking. The two provisions measure different asset perimeters and produce different outcomes. Different subjects, different provisions.

Key Takeaways

  • Comments on the three draft RTS are due 25 November 2026; the virtual public hearing is on 30 September 2026 at 10:00 CEST, with registration closing 25 September 2026 at 16:00 CEST.
  • The EUR 30 billion reclassification threshold and the EUR 5 billion reporting threshold already apply in Level 1 law; the consultation specifies how they are calculated, reported and waived, and does not itself move the thresholds.
  • Regulation (EU) 2024/1623 narrowed the mandatory point (1)(b)(ii) group calculation to Union-established undertakings carrying out MiFID activities (3) and (6), while point (1)(b)(iii) retains a wider group-assets route that the consolidating supervisor may apply, after consulting the supervisory college, to address potential circumvention or risks to Union financial stability.
  • The definition reaches only firms dealing on own account or underwriting on a firm commitment basis; other activity permissions do not pull a firm in on size alone.
  • The monitoring RTS proposes two quarterly templates, I 10.01 and I 10.02, with reference dates of 31 March, 30 June, 30 September and 31 December and remittance on 12 May, 11 August, 11 November and 11 February; these dates are proposals, not yet in force.
  • The waiver RTS under Article 8a(7) CRD is consulted on for the first time; a granted waiver keeps the firm outside point (1)(b) of the CRR credit-institution definition and under its investment-firm authorisation.
  • Firms near the line should re-run the EUR 30 billion test on the new EU perimeter, confirm whether the Article 55 IFR quarterly reporting duty applies to the firm, and assess waiver eligibility before responding.

Sources and References

  • EBA, press release, “The EBA consults on revised technical standards for the reclassification of investment firms as credit institutions”, 25 August 2026: eba.europa.eu
  • EBA, Consultation Paper on draft RTS on the reclassification of investment firms as credit institutions (with the methodology, monitoring and waiver draft RTS): Consultation Paper (PDF)
  • EBA, RTS on threshold monitoring, Annex 1, Templates I 10.01 and I 10.02: Annex 1 (PDF)
  • EBA, RTS on threshold monitoring, Annex 2, Instructions updated to reflect the CRD VI update: Annex 2 (PDF)
  • Regulation (EU) No 575/2013 (CRR), Article 4(1)(1)(b), consolidated text: EUR-Lex
  • Regulation (EU) 2024/1623 (CRR3), amending the definition of credit institution: EUR-Lex
  • Directive 2013/36/EU (CRD), Article 8a, consolidated text: EUR-Lex
  • Directive (EU) 2024/1619 (CRD VI), amending the CRD: EUR-Lex
  • Directive (EU) 2019/2034 (IFD), inserting Article 8a into the CRD: EUR-Lex
  • Regulation (EU) 2019/2033 (IFR), Article 55, consolidated text: EUR-Lex
  • Directive 2014/65/EU (MiFID II), Annex I Section A activities (3) and (6): EUR-Lex
  • Regulation (EU) No 468/2014 (SSM Framework Regulation), significance methodology: EUR-Lex

The recalculation to run before 25 November

The consultation gives large trading and underwriting firms a fixed task with a fixed date. Re-run the EUR 30 billion test on the EU-scoped perimeter, check the number against the old global figure, confirm whether the Article 55 IFR quarterly reporting duty applies to the firm, map the two proposed templates against the data you hold, and decide whether the waiver factors describe your firm. Written comments close on 25 November 2026, and the public hearing on 30 September is the moment to test a reading of the group scope or the waiver grid directly with the EBA.

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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