The EBA updates the Pillar 3 disclosure framework finalising the implementation of the Basel III Pillar 3 framework

• Today’s publication of draft implementing technical standards is a key milestone in the implementation of the latest Basel III disclosure reforms laid down in the new Banking Package.
• The new ITS implement the CRR 3 disclosure requirements on output floor, credit risk, market risk, CVA risk, operational risk and a transitional disclosure on exposures to crypto-assets.
• The alignment of the disclosure requirements with the Basel III framework and its integration with supervisory reporting will promote comparability and consistency of the information.

The European Banking Authority (EBA) published today a final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework introduced by the amending Regulation (EU) 2024/1623 (CRR 3). These ITS will ensure that market participants have sufficient comparable information to assess the risk profiles of institutions and understand compliance with CRR 3 requirements, further promoting market discipline.

The amending Regulation (EU) 2024/1623 (‘CRR 3’) introduced new and amended disclosure requirements stemming from the latest Basel III Pillar 3 reforms, and a mandate for the EBA to develop IT solutions, including templates and instructions, for the disclosure requirements laid down in the banking regulation. The new ITS implement the CRR 3 prudential disclosures by including new requirements on output floor, credit risk, market risk, CVA risk, operational risk and a transitional disclosure on exposures to crypto-assets. In addition, they aim to provide institutions with a comprehensive integrated set of uniform disclosure formats while promoting market discipline.

These ITS constitute the first Pillar 3 deliverable included in the EBA Roadmap on strengthening the prudential framework published in December 2023. Later in 2024, the EBA will complement these ITS with the CRR 3 disclosure requirements that are not directly linked to Basel III implementation, in particular   the extension of the disclosure requirements on ESG risks to all institutions in accordance with the proportionality principle, and new disclosure requirements on shadow banking.

Following the mandate for the EBA to develop IT solutions, these ITS are designed to repeal the Commission Implementing Regulation (EU) 2021/637, with a view to make the technical standards more user-friendly for institutions. The IT solutions according to which disclosures have to be provided, including templates and instructions, can be found on the EBA website.

When developing these ITS, the EBA has sought alignment and integration between the disclosure and reporting frameworks, to facilitate institutions' compliance with both requirements, and an updated mapping tool between the revised disclosure templates and the reporting templates is expected to be published at the beginning of July, together with the new ITS on supervisory reporting for the CRR 3 implementation  published for consultation, together with these ITS, in December 2024. The EBA will later publish a technical package, including DPM, validation rules and taxonomy, that shall be used by large and other institutions to submit this information to the EBA Pillar 3 data hub.

Legal basis and background

Regulation (EU) No 575/2013 (‘the CRR’) as amended by Regulation (EU) 2024/1623 (‘CRR 3’) mandates the EBA, in articles 434a, to develop draft implementing technical standards to specify uniform disclosure formats, and IT solutions, including instructions, for disclosure requirements under Titles II and III of the CRR.

The CRR 3 implements the latest Basel 3 reforms, which strengthen the EU institutions’ prudential framework, including also the related new and amended disclosure requirements for institutions.

Following article 434a(1), new draft implementing technical standards have been developed that implement the CRR 3 changes to the Pillar 3 disclosure framework and replace the Commission Implementing Regulations (EU) 2021/637. The new ITS caters for possible developments related to the FRTB capital framework.