Line4

1 min readWarningEBA reporting framework 4.2Updated 10 November 2026

Risk to client must equal the sum of its six parts (EBA rule v11109_m)

A warning in the investment firms, class 2 return (IFR class 2), on template I 04.00, k-factor requirement calculations.

Check your file against this ruleWhat to do if it fails

The rule in plain words

Risk to client must equal these six added up:

  • Assets under management
  • Client money held - Segregated
  • Client money held - non-segregated
  • Assets safeguarded and administered
  • Client orders handled - cash trades
  • Client orders handled - derivatives trades

All the values are in the K-factor requirement column (0020) of I 04.00.

How the Line4 Check report words itShow

Word for word as the report shows it when the rule fails.

K-factor requirement: Risk to client = Assets under management + Client money held - Segregated + Client money held - Non-segregated + Assets safeguarded and administered + Client orders handled - Cash trades + Client orders handled - Derivatives trades

What to do if your filing fails it

  1. 01Open the template below and find the cells the rule reads.
  2. 02Add up the parts in your file and compare the result with the total.
  3. 03If they differ, a part is missing, a value sits in the wrong row, or the total is out of date.
  4. 04EBA allows a small rounding difference, worked out from the decimals each value is reported with.
  5. 05It runs only when your filing indicators mark I 04.00 as reported.
  6. 06This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.

The cells it reads

K-factor requirement calculations (I 04.00)

Rows

  • 0020Risk to client
  • 0030Assets under management
  • 0040Client money held - Segregated
  • 0050Client money held - Non-segregated
  • 0060Assets safeguarded and administered
  • 0070Client orders handled - Cash trades
  • 0080Client orders handled - Derivatives trades

Column

  • 0020K-factor requirement

A worked example

The first of its checks, with simple numbers.

Illustrative values
Assets under management1,200
Client money held - Segregated800
Client money held - non-segregated450
Assets safeguarded and administered300
Client orders handled - cash trades150
Client orders handled - derivatives trades100
Together3,000
What the rule then expects

Risk to client must then be 3,000.

3,000Passes
3,100Fails

A file that reports 3,000 passes. One that reports 3,100 fails, by 100.

The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.

Show the rule as writtenShow

EBA's formula. Cells are written as {template, row, column, sheet}.

{I_04.00,r0020,c0020,} = {I_04.00,r0030,c0020,} + {I_04.00,r0040,c0020,} + {I_04.00,r0050,c0020,} + {I_04.00,r0060,c0020,} + {I_04.00,r0070,c0020,} + {I_04.00,r0080,c0020,}

Every IFR class 2 rule, by template

Checks like this one, run at the point of submission, are the first step to real-time supervision.