Looking Ahead: European Developments - Horizon Scanner: Finance, August 2025

AML/CFT

Commission Delegated Regulation (EU) 2025/1184 of 10 June 2025 entered into force on 5 August 2025. The delegated regulation amends the list of high-risk third countries with strategic anti-money laundering (AML) and counter-terrorist financing (CTF) deficiencies produced under Article 9(2) of the Fourth Money Laundering Directive (MLD4) to add Algeria, Angola, Côte d'Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela to the list, and to remove Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda and the United Arab Emirates.

CRR - INTERNAL MODELS DEROGATION - EXTRAORDINARY CIRCUMSTANCES

Commission Delegated Regulation (EU) 2025/789 of 23 April 2025 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council (CRR) with regard to regulatory technical standards specifying the conditions and indicators that the EBA is to use to determine whether extraordinary circumstances in the sense of Article 325az(5) and Article 325bf(6) of that Regulation have occurred enters into force on 21 August 2025.

Under Articles 325bf(6) and 325az(5) of the CRR, as amended by the CRR III Regulation ((EU) 2024/1623), competent authorities may allow institutions to derogate from certain requirements of the regulatory framework for the use of internal models, or apply a softer version of those requirements, where in the European Central Bank's (EBA) opinion, extraordinary circumstances have occurred. The regulatory technical standards set out a framework that the EBA should follow when identifying a situation of extraordinary circumstances.

CRR – PILLAR 3 DISCLOSURES

The EBA consultation on draft implementing technical standards amending Commission Implementing Regulation (EU) 2024/3172, as regards the disclosures on ESG risks, equity exposures and the aggregate exposure to shadow banking entities is closing on 22 August 2025.

The proposal sets out enhanced and proportionate disclosure requirements related to ESG-related risks, equity exposures and aggregate exposure to shadow banking entities. It also implements the new codes for the statistical classification of economic activities in the EU (NACE). The key points set out in the proposal are as follows:

• The EBA proposes a proportionate ESG disclosure framework aligned with the Commission's initiative to simplify sustainability reporting.
• Simplified requirements are proposed for small and medium banks, as well as clarifications and enhancements to streamline reporting. No new obligations are introduced for large-listed banks.
• To support institution's implementation, the EBA proposes to introduce transitional measures and supervisory flexibility aimed at reducing the compliance burden for institutions.

Press Release:EBA launches consultation on amended disclosure requirements for ESG risks, equity exposures and aggregate exposure to shadow banking entities

Consultation Paper:CP on disclosures on ESG risks, equity exposures and the aggregate exposure to shadow banking entities

EIDAS REGULATION/ELECTRONIC TRANSACTIONS

Seven commission implementing regulations (ITS) under Regulation (EU) No 910/2014 of the European Parliament and of the Council (the eIDAS Regulation) enter into force on 19 August 2025, with various application dates as set out below. The eIDAS Regulation sets out rules to enable secure electronic transactions in Europe. The ITS in question implement specific provisions of the eIDAS Regulation:

• Implementing regulation (EU) 2025/1566: the ITS set out the standards to be applied by qualified trust service providers when verifying the identity and, if applicable, any specific attributes of a natural or legal person to whom a qualified certificate or qualified electronic attestation of attributes is to be issued. The ITS enter into force on 19 August 2025 and apply from 19 August 2027.
• Implementing regulation (EU) 2025/1567: the ITS set out the standards and specifications for the management of remote qualified electronic signature creation devices and of remote qualified electronic seal creation devices as qualified trust services. The ITS enter into force on 19 August 2025 and apply from 19 August 2027.
• Implementing regulation (EU) 2025/1568: the ITS set out the procedural arrangements for peer reviews of electronic identification schemes and for cooperation on the organisation of such reviews within the European Digital Identity Cooperation Group. The ITS enter into force on 19 August 2025.
• Implementing regulation (EU) 2025/1569: the ITS sets out the reference standards, specifications, and procedures relating to, amongst other things, qualified electronic attestations of attributes and electronic attestations of attributes issued by or on behalf of a public sector body responsible for an authentic source. The ITS enter into force on 19 August 2025, however Articles 6 – 9 will only apply from 19 August 2026.
• Implementing regulation (EU) 2025/1570: the ITS set out the format of, and procedures for, the notification of information on certified qualified electronic signature creation devices and certified qualified electronic seal creation devices. The ITS enter into force on 19 August 2025, and apply from 19 December 2025.
• Implementing regulation (EU) 2025/1571: the ITS set out the formats and procedures for annual reports by supervisory bodies. The ITS enter into force on 19 August 2025.
• Implementing regulation (EU) 2025/1572: the ITS set out the notification requirements for trust service providers that intend to start providing qualified trust services, and procedures around how the supervisory authority can verify compliance with the requirements of the eIDAS Regulation. The ITS enter into force on 19 August 2025 and apply from 19 August 2026.

EU GREEN BONDS REGULATION

Three delegated regulations under Regulation (EU) 2023/2631 of the European Parliament and of the Council (the EU Green Bonds Regulation) enter into force on 14 August 2025.

Delegated Regulations:

• Commission Delegated Regulation (EU) 2025/753 of 16 April 2025: the delegated regulation sets out the content, methodologies, and presentation of the information to be voluntarily disclosed by issuers of bonds marketed as environmentally sustainable or of sustainability-linked bonds in the templates for periodic post-issuance disclosures.
• Commission Delegated Regulation (EU) 2025/754 of 16 April 2025: the delegated regulation sets out the rules of procedure for the exercise of the power to impose fines or periodic penalty payments by the European Securities and Markets Authority (ESMA) on external reviewers.
• Commission Delegated Regulation (EU) 2025/755: the delegated regulation specifies the type of fees to be charged by ESMA to external reviewers of European Green Bonds, the matters in respect of which fees are due, the amount of the fees, and the manner in which those fees are to be paid.

INSURANCE – SYSTEMIC RISK

The International Association of Insurance Supervisors' (IAIS) consultation on the review of the Global Monitoring Exercise, and the Individual Insurer Monitoring assessment methodology closes on 18 August 2025.

The consultation relates to the IAIS Holistic Framework (HF) for the assessment and mitigation of systemic risk in the global insurance sector. A key element of the HF is the Global Monitoring Exercise (GME), which includes an annual assessment of the possible concentration of systemic risks at an individual insurer level, using an assessment methodology as one of the inputs (Individual Insurer Monitoring, or IIM). The objective of the consultation is to seek stakeholders' input on the review of the IIM assessment methodology for the next three-year cycle of application (2026–2028).

Press Release:Public consultation on the review of the Global Monitoring Exercise – Individual Insurer Monitoring assessment methodology

Consultation Paper:Public consultation on the review of the GME Individual Insurer Monitoring assessment methodology

IORP II DIRECTIVE

The Commission's targeted consultation on supplementary pensions closes on 29 August 2025. As part of the consultation, stakeholders are invited to comment on measures to enhance the provision of supplementary occupational and personal pensions via the review of the Directive on the activities and supervision of institutions for occupational retirement provision (IORP II) and the Pan-European Personal Pension Product (PEPP) Regulation. The insights gathered will inform a package of measures to be presented in Q4 2025.

Press Release:Commission consults on how to strengthen supplementary pensions

Consultation Paper:Targeted consultation on supplementary pensions 2025

PAYMENT SYSTEMS - SIPS

Regulation (EU) 2025/1355 of the European Central Bank of 2 July 2025 on oversight requirements for systemically important payment systems (ECB/2025/22) (recast) entered into force on 3 August 2025.

The Regulation amends and replaces the existing ECB Regulation on oversight requirements for systemically important payment systems (SIPS). It sets out the process and criteria for the identification of a payment system as a SIPS and imposes oversight requirements on SIPS operators.

PAYMENT SYSTEMS - MARKET EXPERT GROUP

The Commission published Decision 2025/4118 in July 2025 extending the mandate for the Payment Systems Market Expert Group until 31 December 2030. The decision enters into force on 18 August 2025.

The Payment Systems Market Expert Group is comprised of various types of payment service providers and users whose primary tasks are to assist the Commission in the preparation of policy initiatives regarding payment services, to provide insight concerning practical implementation of those initiatives and to exchange views on best practices or potential issues of concern for the payment services market. In light of the various ongoing initiatives in the payments space, the Commission believes that it is appropriate for the Expert Group to continue its work for another five years.

SINGLE SUPERVISORY MECHANISM (SSM)

In July, the ECB published updated versions of its policies outlining how it exercises options and discretions (O&Ds) when supervising banks in the SSM. The updated policies are set out in the following instruments:

• ECB Guide on options and discretions available in Union law
• Regulation (EU) 2025/1520 of the European Central Bank of 15 July 2025 amending Regulation (EU) 2016/445 on the exercise of O&Ds available in Union law
• Recommendation of the European Central Bank of 15 July 2025 amending Recommendation ECB/2017/10 on common specifications for the exercise of some O&Ds available in Union law by national competent authorities (NCAs) in relation to less significant institutions (LSIs).
• Guideline (EU) 2025/1521 of the European Central Bank of 15 July 2025 amending Guideline (EU) 2017/697 on the exercise of O&D available in Union law by NCAs in relation to LSIs.

The policies were revised to make changes and clarifications relating to how the ECB grants permissions to banks on calculating capital requirements for operational and market risks, whether minority interests in subsidiaries can be included in the capital of a banking group, and how the Danish compromise (which allows banks to risk-weight investments in insurance subsidiaries in certain circumstances instead of deducting them from capital) should be applied. The revised Regulation enters into force on 17 August 2025.