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EBA Proposes New Rules For €30 Billion Investment Firm Threshold

The European Banking Authority (EBA) has proposed new rules for determining when large investment firms should be reclassified as credit institutions, with Cyprus’ regulator urging firms to review the changes.

Launched on Aug. 25, the EBA consultation covers draft regulatory technical standards (RTS) designed to make the assessment more proportionate, transparent and linked to the risks posed by individual firms and groups.

The €30 Billion Threshold

Under Article 8a of the Capital Requirements Directive (CRD), investment firms with total assets above €30 billion are generally expected to seek authorisation as credit institutions rather than operate solely under a MiFID investment firm licence.

Proposed RTS would establish how the threshold is calculated at individual and group level, what firms must report to supervisors and which factors authorities should consider when assessing waiver requests.

Changes to Article 8a prompted the consultation as part of a broader EU effort to align prudential requirements with the size and risk profile of large investment groups.

New Method Would Narrow The Calculation

According to the EBA, amendments to Article 8a have narrowed the scope of the group-level calculation. Under the proposed methodology, only assets held by EU undertakings and their subsidiaries conducting MiFID activities 3 and 6, along with EU branches of third-country entities within the same group, would be included.

Compared with the previous global approach, the new methodology would simplify calculations and reduce the reporting burden for affected firms.

Investment firms with total assets above €5 billion would fall within the reporting requirements. Those firms would submit two reporting templates each quarter, with monthly figures derived through simple interpolation.

Regulators Would Assess More Than Asset Size

Waiver requests would be assessed using several factors beyond a firm’s balance sheet. Authorities would consider organizational structure, booking practices and asset allocation across entities, as well as the business model and share of transactions conducted for clients.

Other factors would include tools for measuring systemic risk, the size and complexity of derivatives portfolios and the firm’s broader market footprint. Decisions would therefore consider both the scale of a group and how its activities could affect financial-system risk.

CySEC Urges Cyprus Firms To Review The Rules

Cyprus’ Securities and Exchange Commission (CySEC) has urged local investment firms to examine the consultation paper and draft RTS, particularly their potential effects on business models, group structures and prudential reporting systems.

Firms are also encouraged to submit feedback before the rules are finalized. Comments are due by Nov. 25, 2026. A virtual EBA public hearing is scheduled for Sept. 30 at 10 am CEST, with registration open until Sept. 25.

Rules Could Affect Large Investment Groups

For firms approaching the €30 billion threshold, the proposed methodology could affect governance, capital planning and group structures. It also reflects closer EU supervision of investment firms whose scale and activities may create risks similar to those associated with banks.

Three areas are covered by the EBA’s work at the request of EU legislators: calculating CRD thresholds, collecting information for ongoing supervision and defining criteria for regulatory waivers.

Firms with complex group structures or rapidly growing asset bases will need to assess how the proposed framework applies to their operations before the standards are finalized.

NERDs Replace FIRE As Young Workers Lose Confidence In Retirement

The FIRE movement promised younger workers a path to financial independence and early retirement. Now, a different group is emerging in the UK: NERDs, or the “Never Ever Retiring Demographic.”

Growing pessimism among Gen Z and millennials is driving the shift, with many questioning whether retirement will ever be financially achievable. Some are responding by reducing or abandoning pension contributions altogether.

Young Workers Are Losing Confidence In Retirement

Research from People’s Pension, a major UK workplace pension provider, found that 47% of Gen Z respondents aged 18 to 27 do not engage with their pension. Another 12%, equivalent to about 2.2 million young people, have stopped saving for retirement because they expect to work indefinitely.

Wider financial pressures are contributing to that outlook. High living costs have pushed milestones such as homeownership, marriage, having children and retirement further away for many younger workers, while inflation, layoffs and stagnant wages have added to uncertainty.

Pension Providers Face A Communication Gap

Financial pressure is only part of the problem. Young workers also say pension providers are failing to explain long-term saving in ways that feel relevant to them.

About 36% of respondents said providers do not explain retirement saving effectively. Among them, 27% said companies appear more focused on selling products than educating customers, while 16% cited complicated language and jargon.

A clear generational difference emerges in the responses. Some 29% of Gen Z respondents said providers fail to explain why pension saving matters, compared with 13% of Gen Xers and Baby Boomers. Similarly, 17% of Gen Z said providers do not use channels they engage with, versus 4% among older generations.

Clearer information could influence behavior. About 70% of Gen Z respondents said they would have started saving earlier if they had known that beginning in their 20s could potentially double their retirement pot compared with starting in their 30s. Another 63% said learning about tax relief and employer contributions motivated them to save.

“In a world where financial doom dominates pension conversations, young savers are tuning out,” said Kirsty Ross, proposition director at People’s Pension. “Our research shows they are not disengaged because they don’t care, they are disengaged because the messages aren’t working.”

Young Savers Want Simpler Tools

Progress bars and goal trackers were among the most popular tools respondents said could make pensions more relevant, cited by 31%. Another 26% wanted reassurance that they could start with small amounts, while 23% wanted examples of what people their age are doing.

Clear, bite-sized steps were cited by 22%, while 19% said light-hearted and relatable stories could make pensions more accessible.

People’s Pension has responded with Pension Drop, a campaign using social media influencers, live events and lifestyle personalities to encourage conversations about retirement saving.

“Looking back, I really wish I’d started earlier,” said Iain Stirling, comedian, TV presenter and Pension Drop ambassador. He said contributions made in someone’s 20s or 30s can make a significant difference later, while employer contributions and tax relief can increase the value of smaller payments.

Small Changes Can Improve Long-Term Saving

Stirling urged younger workers to check their pension provider, establish whether they have multiple pension pots and make sure they are contributing enough to receive the full employer match.

He also recommended increasing contributions after a pay rise or bonus, allowing workers to raise long-term savings without making a large immediate change to their spending.

For younger workers facing high living costs and uncertain career prospects, pension saving remains a difficult sell. Clearer information about employer contributions, tax relief and the long-term effect of starting early could help make retirement planning more tangible.

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Aretilaw firm
eCredo
The Future Forbes Realty Global Properties

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