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La rentrée at EP ECON highlights the importance that secondary legislation will have during this term. Delegated regulations on CRR and ELTIF have been discussed in recent sessions, where ESMA, EBA, and the Commission provided further insights on the details of both DEAs. First, on 24 July 2024 the Commission adopted the CRR delegated act to delay the Fundamental Review of the Trading Book (FRTB) by one year (1 January 2026) due to uncertainties in other jurisdictions. US Federal Reserve's recent re-proposal, which has not yet materialised, created further uncertainty regarding its finalisation. Currently, the US aims to complete its framework by mid-2025, with potential implementation dates as late as January 2027. The UK has set a starting date of January 2026 for its final credit risk package, while other jurisdictions such as Canada and Japan are making adjustments in response to US delays. The Commission believes that the delay in the FRTB will help avoid the risks of uneven implementation, which could entail European banks becoming less competitive and the CMU being negatively impacted. While the EBA expressed concerns that postponing the FRTB might send the wrong signal about Basel III implementation, they also acknowledged that the delegated regulation strikes an appropriate balance given the international context. Along same lines, the ECB recognised the rationale behind the co-legislators' decision to adopt the delegated act, but from a technical perspective, considered that there was no specific need to delay the implementation. Jonás Fernandez (S&D) stressed that the goal of increasing competitiveness should not lead to a less regulated banking sector, just because other jurisdictions decided to delay Basel III. He concluded referring to the fact that if other jurisdictions decided to deviate further from Basel III, the EU should find a way to protect itself from the added risks caused by their non-compliance. Second, on 19 July 2024 the Commission adopted the ELTIF delegated act related to reception policy. The recent exchange of views highlighted differing approaches between ESMA and the Commission. ESMA, in its draft RTS, advocated for stricter liquidity rules to protect retail investors, proposing minimum liquidity buffers and defined notice periods. In contrast, the Commission favors greater flexibility, allowing ELTIF managers to determine liquidity based on redemption frequency. The Commission emphasised that ELTIFs are designed for long-term investments with limited liquidity and not intended as standard mainstream retail products. ESMA also noted the potential "architecture problem" within the ELTIF regulation, which could create challenges under stress conditions. If you are interested, you can find the full readout of both debates below 👇 🔗 https://shorturl.at/58rT1 🔗 https://shorturl.at/Md921 DeHavilland EU OPP