**European Investment Firms Face New Regulatory Framework for Assets Exceeding €30 Billion**
The European Banking Authority (EBA) has initiated a consultation process aimed at establishing new regulations for investment firms with total assets surpassing €30 billion. This move is part of a broader effort to refine the regulatory landscape following amendments to the Capital Requirements Directive (CRD) made in 2024.
The consultation focuses on three draft regulatory technical standards that will clarify how investment firms should calculate their total assets, report these figures to regulatory bodies, and determine eligibility for a potential waiver from the requirement to obtain a banking license. Under the current regulatory framework, firms with assets exceeding the €30 billion threshold must secure authorization as a credit institution, rather than operating solely under an investment firm authorization as outlined in the Markets in Financial Instruments Directive (MiFID).
The EBA has emphasized the necessity of these changes, stating that they will provide greater clarity regarding which entities and assets must be included in the total asset calculation. The revisions are designed to ensure a more proportionate and risk-based regulatory approach, particularly for larger investment firms that pose significant risks to financial stability.
One of the key aspects of the consultation is the introduction of draft rules regarding waivers from the banking authorization requirement. For the first time, the EBA is seeking input on the factors that national regulators should consider when determining whether an investment firm can be granted a waiver. If approved, such a waiver would allow firms to continue operating under their existing investment firm authorization instead of transitioning to a credit institution authorization.
The EBA believes that this revised framework will contribute to a more balanced regulatory environment while maintaining a focus on the risks associated with larger investment firms. By clarifying the criteria for the €30 billion threshold, the EBA aims to provide both firms and regulators with a clearer understanding of the regulatory obligations that apply based on firm size.
The consultation period is set to remain open until November 25, 2026, allowing stakeholders ample time to submit their feedback on the proposed regulations. Additionally, the EBA will host a virtual public hearing on September 30, 2026, at 10 AM Central European Summer Time, where interested parties can engage in discussions regarding the consultation. Registration for the hearing is required by September 25, 2026, at 4 PM CEST, and participants will receive dial-in details upon registration.
Comments and feedback on the consultation paper can be submitted through the EBA’s online consultation page. The authority has committed to publishing all received comments after the consultation period concludes, unless respondents request confidentiality for their submissions.
This consultation is particularly timely as European regulators continue to refine the rules governing investment firms, especially those whose size and activities may align them more closely with the banking sector in terms of their potential impact on financial stability. The €30 billion threshold serves as a critical dividing line, with firms exceeding this limit generally required to adhere to the more stringent regulatory requirements applicable to credit institutions, unless they qualify for a waiver.
The EBA's efforts reflect a growing recognition of the need to adapt regulatory frameworks to the evolving landscape of the financial sector, ensuring that regulations are both effective and proportionate to the risks posed by larger investment firms. As the consultation unfolds, the feedback gathered from stakeholders will play a crucial role in shaping the final regulatory standards that will govern investment firms in the European Union.