Consultation on draft Guidelines on the application of the group capital test for investment firms

  • Consultation
  • 25 OCTOBER 2023
  • EBA/CP/2023/16

The European Banking Authority (EBA) launched today a consultation on the draft Guidelines on the application of the group capital test for investment firm groups. These Guidelines aim at setting harmonised criteria to address the observed diversity in the application of the group capital test across the EU. In particular, the Guidelines identify criteria to assist Competent Authorities in their assessment of the simplicity of the group structure and the significance of the risk posed to clients and the market. The consultation runs until 25 October 2023. 

The criteria for allowing the use of the application of the group capital test, as laid down in the Investment Firms Regulation (IFR), appear to be subject to different interpretations by supervisory authorities. As a result, the inconsistent application of this provision can have a significant impact on the level playing field. Accordingly, the EBA is of the view that a more harmonised application of this provision is necessary and can be achieved with these Guidelines. 

These Guidelines set qualitative and quantitative criteria that Competent Authorities should consider for the purpose of assessing whether the conditions set out in the IFR for receiving the permission to use the group capital tests are met. This consultation paper includes several questions addressed to the relevant stakeholders to gather feedback around the proposed methodology and criteria. 

Consultation process 

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 25 October 2023. All contributions received will be published following the close of the consultation, unless requested otherwise. 

A public hearing will take place via conference call on 5 September 2023 from 10:00 to 11:30 CET. 

Legal basis and background 

The EBA has developed the draft Guidelines on its own initiative, in accordance with Article 16 of its founding Regulation, which mandates the Authority to issue guidelines and recommendations addressed to competent authorities or financial institutions with a view to establishing consistent, efficient and effective supervisory practices within the ESFS, and to ensuring the common, uniform and consistent application of Union law. 

The group capital test is set out in Article 8 of Regulation (EU) 2019/2033. The criteria for granting its use are set out in paragraph 8(1) and 8(4) of that regulation.  


The form is now closed.


Consultation paper on draft guidelines on GCT for investment firms

(421.66 KB - PDF) Last update 25 July 2023