Regulatory and compliance updates including the US bank capital framework, Malaysia Basel III IRB approach, EU FRTB delays, and more.
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Europe and the UK
June 24, 2025 – The UK Prudential Regulation Authority (PRA) Bank of England has published CP13/25, outlining proposed changes to rules and expectations for credit unions investing in Credit Union Service Organisations (CUSOs). Key proposals include:
CUSOs, which provide shared services to credit unions, are seen as a vehicle to support sector growth. The PRA aims to clarify the regulatory framework while maintaining appropriate prudential safeguards.
June 18, 2025 – The European Banking Authority (EBA) has opened a public consultation on draft Regulatory Technical Standards (RTS) that set out the minimum information to be provided when notifying a proposed acquisition of qualifying holdings in a credit institution. The RTS aims to harmonize the notification process and support a consistent prudential assessment across Member States, in line with the five assessment criteria under the Capital Requirements Directive (CRD). The consultation is open until 18 September 2025.
June 18, 2025 – The European Commission has adopted new rules under Regulation (EU) 2025/1190 requiring certain financial institutions to conduct threat-led penetration testing (TLPT). The standards align with the TIBER-EU framework and provide criteria for entity selection, scope definition, and testing methodology. TLPT involves simulating sophisticated cyberattacks on live production systems. Institutions must maintain strict confidentiality, implement mitigation controls, report outcomes, and submit remediation plans along with formal attestations of compliance.
June 17, 2025 - The European Commission has proposed amendments to the Anti-Money Laundering Regulation (AMLR) to bolster EU-level supervision of crypto asset service providers (CASPs). The proposal designates the EU Anti-Money Laundering Authority (AMLA) as the lead supervisor for high-risk CASPs with cross-border operations and sets out selection criteria for entities under its supervision. The move is intended to ensure consistent oversight and address emerging risks in the crypto sector.
June 16, 2025 – The European Banking Authority (EBA) EBA has published three final draft technical standards essential to the EU Banking Package. These aim to enhance supervisory oversight and ensure regulatory consistency:
June 12, 2025 - The European Commission has proposed postponing the application of the Fundamental Review of the Trading Book (FRTB) rules to January 1, 2027. While most Basel III measures remain scheduled for 2025, this delay allows additional time for alignment with global standards and to prevent competitive disadvantages for EU banks in capital markets.
Asia-Pacific
June 20, 2025 – Bank Negara Malaysia has released an exposure draft updating the capital adequacy framework for credit risk under the Internal Ratings-Based (IRB) approach. Scheduled for implementation in 2028, the revised framework introduces:
The proposal aligns Malaysia with global Basel III reforms. Institutions must participate in a Quantitative Impact Study and submit feedback by December 2025.
June 18, 2025 – Regulators across Asia-Pacific are increasingly embedding climate-related risks into their supervisory frameworks. Disclosures are now widely mandated, aligning with international standards such as TCFD and ISSB. While capital treatment remains limited, climate stress testing and scenario analysis are becoming more prevalent. Singapore, Malaysia, and New Zealand are noted for issuing detailed supervisory guidance. Institutions are expected to integrate climate risks into governance and risk management to enhance resilience and support sustainable finance objectives.
RBI issues Master Circular to streamline credit facilities for SCs/ STs June 16, 2025 - The Reserve Bank of India (RBI) issued a ‘Master Circular – Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs)’ consolidated guidelines to outline measures for banks to enhance credit access and financial inclusion for SCs and STs through streamlined procedures, special reservations, and enhanced monitoring.
What was announced:
Key changes:
Reports/Returns impacted:
June 13, 2025 – The Hong Kong Monetary Authority (HKMA) has issued a consultation on revised return templates to implement the Basel Committee’s standards for crypto- asset exposures. While some forms remain unchanged, updated instructions aim to provide clarity. Affected returns include:
The consultation closes on 11 July 2025.
What was announced:
Key changes introduced:
1. Cost overruns & DCCO extension
2. Provisioning requirements
The Directions establishes a framework for the regulated entities (REs) for financing project loans, while addressing the underlying risks.
NFA issues notification on One-Form System for bank regulatory reporting
May 20, 2025 - The National Financial Regulatory Administration (NFRA) issued the "Notice of the National Financial Regulatory Administration on Advancing the 'One-Form System' for Bank Regulatory Reporting" to local financial regulatory bureaus and banking institutions. This notice mandates the comprehensive implementation of the "One-Form System" across all banking institutions and provides a detailed blueprint and implementation roadmap.
This notice formally announces the decision by NFRA to comprehensively advance the "One-Form System" initiative. All regulatory bureaus are required to submit the following to NFRA:
The implementation of the "One-Form System" data reporting for banking institutions will be phased in according to two key criteria: whether they are located in pilot regions and their asset size. The rollout will follow these milestones:
All banking and financial institutions are required to complete implementation by the end of 2027.
US and Canada
June 23, 2025 – The Federal Reserve (FRB) has joined the OCC and FDIC in dropping the “reputational risk” from the examination component.
The FRB has started the process of reviewing and removing references to reputation and reputational risk from its supervisory materials, including examination manuals, and, where appropriate, replacing those references with more specific discussions of financial risk. The FRB will train examiners to help ensure this change is implemented consistently across FRB-supervised banks and will work with the other federal bank regulatory agencies to promote consistent practices, as necessary. This change does not alter the FRB's expectation that banks maintain strong risk management to ensure safety and soundness and compliance with law and regulation, nor is it intended to impact whether and how FRB-supervised banks use the concept of reputational risk in their own risk management practices. SR-95-1
June 23, 2025 - On July 22, the FRB will hold a conference to discuss the US bank capital framework, which will include “the design and calibration of the leverage ratios.” Vice Chair Bowman recently remarked, “we should reconsider capital requirements for a wider range of banks, including the SLR’s application to banks with more than $250 billion in assets, Tier 1 leverage requirements, and the calibration of the community bank leverage ratio.” Each of the banking agencies’ leadership has spoken on ideas on how to change, but none have provided details of the expected proposal.
On June 6, the FDIC on behalf of the three banking agencies (FDIC OCC and FRB) submitted to the Office of Information and Regulatory Affairs (OIRA) a draft rule entitled “Modifications to Supplemental Leverage Capital for Large Banking Organizations; Total Loss-Absorbing Capacity Requirements for U.S. Global Systemically Important Bank Holding Companies.”
June 20, 2025 - President Trump signed into law a joint resolution overturning an OCC rule that changed how proposed bank mergers are reviewed. Senator John Kennedy used the Congressional Review Act to annul the revised rule that was finalized in September 2024 and effective January 2025. On the House side, Representative Andy Barr introduced an accompanying resolution.
The OCC’s rule was intended to improve transparency and clarify the review process. It also eliminated the expedited review process, the practice of automatically approving applications 15 days after the close of the comment period unless an action was taken.
Our Financial Regulatory News Hub provides up-to-date insights, covering key regulatory changes and updates that impact financial institutions globally. Previous editions are available here.