Welcome to the FIG Top 5 at 5

On 6 November 2025, the Central Bank of Ireland (“Central Bank”) published a settlement notice (“Settlement Notice”) announcing that it has fined Coinbase Europe Limited (“Coinbase Europe”) €21,464,734 for anti-money laundering and counter terrorist financing (“AML / CFT”) breaches between 2021 and 2025 under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“CJA 2010”).

This is the first enforcement outcome in the crypto-assets sector and the fourth settlement under the Administrative Sanctions Procedure (“ASP”) following the changes introduced by the enactment of the Central Bank (Individual Accountability Framework) Act, 2023.

Findings

Coinbase Europe is registered as a virtual asset service provider and consequently, is required to monitor customer transactions on an ongoing basis.

The Settlement Notice sets out that, in May 2023, Coinbase Europe failed to inform the Central Bank that there had been a transaction monitoring system failure. The Central Bank was notified of the non-monitoring issue in November 2023, who, ultimately commenced an enforcement investigation into Coinbase Europe in August 2024.

Specifically, the investigation found that Coinbase Europe filed to comply with the CJA 2010 by:

• failing to fully and properly monitor the non-monitored transactions in the period from 23 April 2021 to 19 March 2025;
• failing to adopt sufficient internal policies, controls and procedures to prevent and detect the commission of money laundering and terrorist financing, on the basis that any policies, controls and procedures that were in place did not operate to prevent and detect the commission of money laundering and terrorist financing, between 23 April 2021 and 19 March 2025; and
• failing, on dates between 23 April 2021 and 19 March 2025, to conduct increased monitoring in respect of 184,790 transactions.

Sanction

Coinbase Europe have admitted to the prescribed contraventions set out in the Settlement Notice and the Central Bank have imposed the following sanctions:

• a reprimand; and
• a monetary penalty in the amount of €30,663,906 reduced to €21,464,734 after application of a 30% settlement scheme discount.

Next Steps

The sanctions have been accepted by Coinbase Europe and are subject to confirmation by the High Court. The sanctions will not take effect unless such confirmation takes place.

On 6 November 2025, the European Commission (“Commission”) launched a consultation (“Consultation”) on the application of the market risk prudential framework in the context of the Basel III standards, also known as the fundamental review of the trading book (“FRTB”).

Background

The Commission is consulting on this matter due to the uncertainty regarding the implementation in several jurisdictions of the Basel III standards for market risk, particularly taking account of the consequential possibility of an unlevel playing field in international and EU capital markets.

Specifically, the Commission is considering the use of the empowerment in article 461a of the Capital Requirements Regulation (“CRR”) which would allow it to adopt a new delegated regulation by the end of March 2026. This action is aimed at neutralising negative impacts stemming from an unlevel playing field in the international implementation of the FRTB, in the short term.

Consultation

Due to prior postponements of the implementation of the market risk rules, by the Commission, in 2024 and 2025, the empowerment in article 461a CRR now only allows for the introduction of targeted relief measures and targeted multipliers for up to three years and covers capital requirements and own funds requirements for market risk – Part Three and Title IV of CRR, respectively.

For more information on previous postponements, see FIG Top 5 at 5 dated 1 August 2024.

The Commission is seeking feedback on the way forward as regards the implementation of the FRTB, specifically inviting commentary on the two components comprising the policy options outlined in the Consultation.

The first component relates to the use of article 461a to introduce temporary, targeted amendments to the market risk framework that would address aspects of the framework that other jurisdictions have deviated from, or indicated that they will deviate from in the their final FRTB implementation.

The Consultation notes that these amendments are very similar to those included in the March 2025 consultation – for more information, see FIG Top 5 at 5 dated 27 March 2025. However, some have been enhanced based on feedback received during the March 2025 consultation.

The Consultation explains that the proposed amendments target elements where it is deemed that the FRTB calibration could be enhanced or revisited, while keeping its primary objective to provide a more robust and risk‑sensitive prudential framework for the capitalisation of market risk by banks. The Consultation sets out the areas proposed to be addressed such as:

• maintaining the profit and loss attribution test as a monitoring tool under the internal model approach;
• phasing in the own funds requirements for market risks of non‑modellable risk factors;
• simplification / operationalisation of the framework for the calculation of own funds requirements for collective investment undertaking positions under both the alternative standardised approach and the alternative internal model approach; and
• phasing in the own funds requirements for specific instruments under the residual risk add‑on calculation under the alternative standardised approach.

An annex to the Consultation contains a detailed description of all of the proposed measures.

The second component referred to in the Consultation is the proposal to use article 461a CRR to introduce a multiplier for the overall market risk capital requirements that banks negatively impacted by the new rules would be allowed to use to significantly limit their market risk capital requirements increases for three years.

The Consultation sets out several ways to design such a multiplier and describes relevant advantages and disadvantages associated with the various options.

As set out above, the Commission is seeking feedback on the two components outlined above and also welcomes suggestions as to any alternative calibration methodologies for the multiplier applied to the overall market risk capital requirements.

Next Steps

The Consultation is open for feedback until 6 January 2026.

On 10 November 2025, the European Council (“Council”) published an ‘I’ Item Note (“Note”) from the Presidency to the permanent representatives committee (“COREPER”) addressing the crisis management and deposit insurance (“CMDI”) framework for banks in the EU.

The CMDI contains legislative proposals for amendments to:

• the Bank Recovery and Resolution Directive (“BRRD”);
• the Single Resolution Mechanism (“SRM”); and
• the Deposit Guarantee Schemes Directive (“DGSD”).

In June 2025, a provisional political agreement was reached between the co-legislators resulting in the final texts – for more information, see FIG Top 5 at 5 dated 3 July 2025.

The Note details that, on 5 November 2025, the European Parliament’s (“Parliament”)  Economic and Monetary Affairs Committee (“ECON”) endorsed the texts.

Further, the Note explains that, on 6 November 2025, the chair of ECON sent a letter to the chair of COREPER stating that she will recommend to the plenary that the Council’s position be accepted without amendments at Parliament’s second reading, subject to, the Council transmitting its position, as agreed, to the Parliament and also subject to legal linguistic review.

The Note sets out that the texts contained in the annexes to that letter of 6 November 2025, are identical to the following texts, which are set out in addenda to the Note:

• text regarding the amendment of BRRD as regards early intervention measures, conditions for resolution and financing of resolution action;
• text regarding amendments to DGSD as regards the scope of deposit protection, use of deposit guarantee schemes funds, cross-border cooperation, and transparency; and
• text regarding amendments to SRM as regards early intervention measures, conditions for resolution and funding of resolution action.

Next Steps

The Note concludes by inviting COREPER to reach political agreement at its meeting on 12 November 2025 on the basis of the texts, set out above, such that an early second reading can be facilitated.

On 11 November 2025, the European Parliament’s (“Parliament”) committee on economic and monetary affairs (“ECON”) published a report (“Report”) on the impact of artificial intelligence (“AI”) on the financial sector.

The Report takes account of various publications / reports from stakeholders such as, the European Insurance and Occupational Pensions Authority’s April 2024 report on the digitalisation of the European insurance sector and the European Banking Authority’s August 2023 report on machine learning for internal ratings-based models. The Report also has regard to various European  legislation across the financial services sector, including the Insurance Distribution Directive, the Markets in Financial Instruments Regulation, the Solvency II Directive and the Capital Requirements Directive.

The Report was prepared by Arba Kokalari (“Rapporteur”) who stated, in the Report, that the debate on AI in financial services must be grounded in reality and focused on tangible and plausible questions, with existing legal frameworks taken into account, together with the practical realities of using AI in financial services, rather than speculating on abstract or theoretical concerns.

The Parliament, through the Report, calls on the European Commission (“Commission”) and national supervisory authorities, to take various actions, some of which are highlighted below.

The Report considers the impact of AI on the financial services sector across three main areas, as follows:

The state of AI adoption in financial services

Under this heading the Report notes that, so far, the deployment of AI in financial services has been prudent with most uses relating to reducing costs by streamlining operations rather than creating new revenue streams. In this regard, the Report also notes that many use cases represent “low-hanging fruit” rather than high risk innovation. Additionally, it is highlighted that such uses mean that the financial system is not, as of yet, subject to AI models that run the risk of threatening financial stability or consumer interests.

Some of the matters highlighted, by the Parliament, via the Report are as follows:

• AI is a major opportunity for EU financial institutions to develop more innovative products, streamline operations and improve competitiveness on a global scale;
• the use of AI in financial services has the potential to bring societal benefits, including more effective fraud detection and prevention, anti-money laundering checks and sanctions checks, customer support, transaction monitoring, personalised financial advice, environmental, social and governance data gathering;
• the use of AI in the financial sector should strike a balance between innovation and competitiveness on the one hand, and risk management, consumer protection and financial stability on the other hand;
• the rise of AI poses challenges for supervisory authorities, particularly given the lack of AI-specific expertise and adequate supervisory tools to assess advanced machine learning and generative AI models;
• the Parliament calls on the European and national supervisory authorises to adapt to the increasing use of AI in financial services and to monitor, assess and mitigate risks to consumers and financial stability, while not discouraging innovation through overly prescriptive regulatory approaches;
• reliance on a small number of providers for a given service could lead to systemic risks in the event of disruptions, especially if rapid migration to alternative providers is not feasible; and
• the Parliament is supportive of initiatives to boost AI and cloud development in the EU, especially with a view to developing AI services that are fully compliant with EU data protection and fundamental rights frameworks, while also strengthening strategic autonomy and resilience.

The regulatory landscape for AI in financial services

The Report highlights the fact that the financial services sector is already highly regulated but does point to the need to continuously monitor regulatory gaps and evolving AI use cases in finance, stressing the importance of safeguarding consumer rights and the right to privacy. Some of the matters highlighted under this heading are as follows:

• the EU has adopted a more risk-based approach to AI regulation than other jurisdictions, noting the associated challenges for the development and adoption of AI in financial services but pointing to this as an opportunity to build trust;
• the EU Artificial Intelligence Act (“AI Act”) takes account of the current financial services acquis and aims to avoid duplication by way of derogations, particularly as regards internal governance and quality management processes;
• the Parliament calls on the Commission and NCAs to identify and address any inconsistencies regarding the AI Act’s implementation and as part of the upcoming Digital Omnibus package;
• the Parliament encourages supervisory authorities to strengthen coordination, cooperation and information exchange to avoid overlapping jurisdiction claims and also encourages the Commission to avoid the fragmentation of regulatory approaches through strengthening cooperation with international partners in global standard-setting forums; and
• the right balance needs to be achieved when it comes to taking advantage of the use AI in financial services and the protection of consumers’ data.

Recommendations to ensure responsible use of AI in financial services

Under this heading, the Report notes that the EU is lagging behind as regards AI innovation and investment, highlighting that the financial services sector has the potential to act as a catalyst in mobilising private investment in AI due to it being the largest spender in ICT products and services. The Report calls for “an ambitious proposal to jump-start the European venture capital scene as part of the savings and investments union.”

Some further matters highlighted, under this heading, include:

• there is a need for clear and practical guidance on the application of existing financial services legislation with regard to the use of AI, with consistent definitions and the simplification of the regulatory framework, to avoid duplicated requirements;
• there needs to be a balance between the responsible use of AI and providing space for innovation;
• the Parliament calls on the Commission to consider how AI-driven tools can be used in financial markets, such as in intermediation, portfolio management and compliance automation, to contribute to the objectives of the savings and investments union, including supporting retail investors in making informed investment decisions;
• additional legislation would add complexity and uncertainty and ultimately risk depriving the financial sector of the benefits of AI use;
• the Parliament “strongly advises” the Commission and member states to coordinate to avoid gold-plating relevant legislation and to prevent the creation of new barriers in cross-border markets;
• the Parliament calls on the Commission and member states to remove entry barriers in the EU for AI-driven innovative financial undertakings, including through streamlined licensing, cross border scale-ups and inclusion in supervisory innovation hubs;
• there is a need for strong AI literacy, digital skills, and talent involvement, supported by both public-sector upskilling initiatives and market-based solutions;
• the Parliament calls on the Commission and national supervisory bodies to assess the added value of AI-specific regulatory sandboxes, innovation hubs and cross-border testing environments for financial services in enabling experimentation with AI-driven financial innovation; and
• encourages the European and national supervisory authorities to enhance supervisory tools and technology through the use of AI and to integrate them into daily supervisory activities to improve the efficiency and effectiveness of financial supervision.

Next Steps

The Parliament, in the Report, has instructed its President to forward the Report to the European Council and the governments and parliaments of member states.

1. Delegated regulations for creation of consolidated tape under MiFIR published in OJEU

On 3 November 2025, five delegated regulations, containing technical standards as regards the creation of consolidated tape under the regulation on markets in financial instruments (“MiFIR”), were published in the official journal of the European Union (“OJEU”).

The European Commission adopted the delegated regulations in June 2025 – for more information, see FIG Top 5 at 5 dated 19 June 2025 and FIG Top 5 at 5 dated 26 June 2025.

The five delegated regulations are as follows:

• Commission Delegated Regulation (EU) 2025/1143 with regard to regulatory technical standards (“RTS”) on the authorisation and organisational requirements for approved publication arrangements and approved reporting mechanisms, and on the authorisation requirements for consolidated tape providers (“CTPs”);
• Commission Delegated Regulation (EU) 2025/1155 with regard to RTS specifying the input and output data of consolidated tapes, the synchronisation of business clocks and the revenue redistribution by the CTP for shares and ETFs;
• Commission Delegated Regulation (EU) 2025/1156 with regard to RTS on the obligation to make market data available to the public on a reasonable commercial basis;
• Commission Implementing Regulation (EU) 2025/1157 laying down implementing technical standards (“ITS”) for the application of MiFIR with regard to the standard forms, templates and procedures for the authorisation of approved publication arrangements, approved reporting mechanisms and CTPs, and related notifications; and
• Commission Delegated Regulation (EU) 2025/1246 amending RTS set out in delegated regulations (EU) 2017/583 and (EU) 2017/587 as regards transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances, and equity instruments.

Next Steps

All of the delegated regulations, set out above, will enter into force on 23 November 2025, being 20 days following their publication in the OJEU.

 2. Commission Implementing Regulation amending reporting and disclosure ITS under IFR published in OJEU

On 31 October 2025, Commission implementing regulation (EU) 2025/2159 (“Regulation”)  was published in the official journal of the European Union (“OJEU”).

The Regulation amends the implementing technical standards (“ITS”) contained in implementing regulation (EU) 2021/2284 on supervisory reporting and disclosures of investment firms which relates to the Investment Firms Regulation (“IFR”).

On foot of the changes introduced by the Capital Requirements Regulation III (“CRR III”), the reporting framework for investment firms has been revised and so amendments to implementing regulation (EU) 2021/2284 were required.

The European Banking Authority did not consult on the changes to the ITS due to the fact that no substantive changes were involved.

The Commission adopted the Regulation on 27 October 2025.

Next Steps

The Regulation will enter into force on 20 November 2025, being 20 days following publication in the OJEU.