2026 VS 2025 CURRICULUM CHANGES

Official analysis of GARP’s FRM Part II curriculum updates for 2026, highlighting
additions, deletions, renumbering, and learning objective (LO) modifications across
all six subject areas, based on published curriculum change logs.

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EXECUTIVE SUMMARY: WHAT CHANGED

OVERALL SCOPE

• Total readings increased from 103 (2025) to 104 (2026)
• Net change: +1 reading
• Exam weights remain unchanged across all six subjects

Curriculum evolution in 2026 is incremental and targeted, not a structural rewrite.
Most subjects remain stable, with changes concentrated primarily in Market Risk and Current Issues.

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CONCENTRATION OF CHANGES

Subject	Nature of Change
Market Risk (MR)	Most active area: reading deletions, additions, reordering, renaming, and multiple learning objective changes
Current Issues (CI)	Significant annual refresh with extensive reading rotation
Liquidity & Treasury Risk (LR)	Targeted learning objective changes with no change in reading count
Investment Management (IM)	No reading changes; limited learning objective refinements only
Credit Risk (CR)	One clarified learning objective
Operational Risk (OR)	No curriculum or learning objective changes

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EXAM WEIGHTS: COMPLETE STABILITY

Subject	Weight	Status
Market Risk	20%	Content adjusted through new readings and LO updates
Credit Risk	20%	Minor learning objective refinement
Operational Risk	20%	No changes
Liquidity Risk	15%	Targeted learning objective updates only
Investment Management	15%	Learning objective wording updates only
Current Issues	10%	Major topic rotation with new readings

Strategic study time allocation remains unchanged.

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CHANGE CLASSIFICATION FRAMEWORK

We categorize updates as follows:

• READING ADDED – New examinable content introduced
• READING DELETED – Content removed from the curriculum
• READING REORDERED / RENAMED – Content unchanged, reference numbers updated
• LO ADDED / DELETED / MODIFIED – Expectations within a reading have changed

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MARKET RISK (MR): PRIMARY AREA OF CHANGE

Market Risk experienced the largest volume of technical adjustments in 2026.

READING CHANGES

Deleted

• MR 6 – Messages from the Academic Literature on Risk Measurement for the Trading Book

Newly Added

• MR 6 – Validating Bank Holding Companies’ Value-at-Risk Models for Market Risk
• MR 7 – Beyond Exceedance-Based Backtesting of VaR Models
• MR 16 – The Vasicek and Gauss+ Models
  

Deleted Readings	Newly Added Readings
MR 6 – Messages from the academic literature on risk measurement for the trading book	MR 6 – Validating Bank Holding Companies’ Value-at-Risk Models for Market Risk
	MR 7 – Beyond Exceedance-Based Backtesting of Value-at-Risk Models: Methods for Backtesting the Entire Forecasting Distribution Using Probability Integral Transform
	MR 16 – The Vasicek and Gauss+ Models

REORDERED READINGS (NO CONTENT CHANGE)

Multiple readings were renumbered due to insertions, including:

• Correlation series (MR 8–10)
• Term structure model series (MR 14–15)
• Volatility and FRTB topics (MR 17–18)

Current Reading	Previous Reading
MR 8 – Correlation Basics: Definitions, Applications, and Terminology	Previously MR 7
MR 9 – Empirical Properties of Correlation: How Do Correlations Behave in the Real World?	Previously MR 8
MR 10 – Financial Correlation Modeling: Bottom-Up Approaches	Previously MR 9
MR 14 – The Art of Term Structure Models: Drift	Previously MR 13
MR 15 – The Art of Term Structure Models: Volatility and Distribution	Previously MR 14
MR 17 – Volatility Smiles	Previously MR 15
MR 18 – Fundamental Review of the Trading Book	Previously MR 16

RENAMED & REORDERED READINGS

• MR 11 – Regression Hedging and PCA (formerly Empirical Approaches to Risk Metrics and Hedging)
• MR 12–13 – Term structure readings renamed for conceptual clarity

Current Reading	Earlier Known As
MR 11 – Regression Hedging and Principal Component Analysis (2025)	MR 10 – Empirical Approaches to Risk Metrics and Hedging (2024)
MR 12 – Arbitrage Pricing with Term Structure Models	MR 11 – The Science of Term Structure Models (2024)
MR 13 – Expectations, Risk Premium, Convexity, and the Shape of the Term Structure	MR 12 – The Evolution of Short Rates and the Shape of the Term Structure

LEARNING OBJECTIVE CHANGES

• MR 5 – Expanded to include calculation of general and specific risks
• MR 11 – New LO distinguishing regression vs reverse regression hedges
• MR 13 – New focus on bond return decomposition and expected return

Chapter	Old Learning Objective	New Learning Objective
MR 5 – Backtesting VaR	Explain and demonstrate how the mapping process captures general and specific risks.	Explain how the mapping process captures general and specific risks, and calculate these risks in a portfolio given a set of primitive risk factors.
MR 11 – Regression Hedging and Principal Component Analysis	N/A (Newly Added Objective)	Explain why and how a regression hedge differs from a hedge based on a reverse regression.
MR 13 – Expectations, Risk Premium, Convexity, and the Shape of the Term Structure	Evaluate the impact of changes in maturity, yield, and volatility on the convexity of a security.	Identify the components into which the return on a bond can be decomposed, and calculate the expected return on a bond for a risk-averse investor.

Implication:
Market Risk content depth has increased, especially in model validation, distributional backtesting, and term structure interpretation.

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CREDIT RISK (CR): MINOR REFINEMENT

• No readings added or removed
• One LO modified

CR 5 – Introduction to Credit Risk Modeling

• Now explicitly requires estimating risk-weighted assets in addition to capital adequacy ratios

Chapter	Old Learning Objective	New Learning Objective
CR 5 – Introduction to Credit Risk Modeling and Assessment	Estimate capital adequacy ratio of a financial institution.	Estimate risk-weighted assets and capital adequacy ratio of a financial institution.

Impact: Clarification, not expansion.

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OPERATIONAL RISK & RESILIENCE (OR)

• No reading changes
• No LO changes

Category	2026 vs 2025 Status
Readings	No readings added or deleted
Learning Objectives	No learning objective changes

2025 materials remain fully valid for 2026.

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LIQUIDITY & TREASURY RISK (LR): TARGETED ADJUSTMENTS

LEARNING OBJECTIVE CHANGES

• LR 5 – U.S. legal reserve calculation LO deleted
• LR 16 – Expanded focus on effectiveness of central bank swap lines
• LR 19 – Broader evaluation of illiquid assets, including rebalancing and optimization effects

Chapter	Old Learning Objective	New Learning Objective
LR 5 – Liquidity and Reserves Management: Strategies and Policies	Summarize the process taken by a U.S. bank to calculate its legal reserves.	Deleted
LR 16 – US Dollar Shortage in Global Banking and International Policy Response	Discuss how central bank swap agreements overcame challenges commonly associated with international lenders of last resort.	Describe the policy response by international central banks to alleviate the US dollar shortage and assess its effectiveness.
LR 19 – Illiquid Assets	Evaluate portfolio choice decisions on the inclusion of illiquid assets.	Evaluate the impact of allocating illiquid assets to a portfolio, including the impact on rebalancing and trading and on optimizing the proportion of illiquid assets.

No readings added or removed.

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INVESTMENT MANAGEMENT (IM): STABLE STRUCTURE

• No readings added
• No readings deleted
• Two LO refinements

Reading Changes	Status
Deleted Readings	None
Newly Added Readings	None

LO UPDATES

• IM 4 – Inputs to portfolio construction now include practical challenges
• IM 5 – Requires calculation of:
  • Risk-minimizing portfolio
  • Portfolio maximizing return-to-risk ratio

Chapter	Old Learning Objective	New Learning Objective
IM 4 – Portfolio Construction	Distinguish among the inputs to the portfolio construction process.	Describe the inputs to the portfolio construction process and explain challenges faced when using these inputs.
IM 5 – Portfolio Risks: Analytical Methods	Explain the risk-minimizing position and the risk and return-optimizing position of a portfolio.	Explain and calculate the risk-minimizing position and position that maximizes the ratio of expected return to risk.

Important Correction:
There is no expansion, relocation, or restructuring of Investment Management in 2026.

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CURRENT ISSUES (CI): ANNUAL ROTATION CONTINUES

READING CHANGES

• 9 readings deleted
• 8 new readings added
• Net change: –1 reading

Deleted Readings	Newly Added Readings
CI 1 – Review of the Federal Reserve’s Supervision and Regulation of Silicon Valley Bank	CI 1 – 2023 Bank Failures, Preliminary lessons learnt for resolution
CI 2 – The Credit Suisse CoCo Wipeout: Facts, Misconceptions, and Lessons for Financial Regulation	CI 2 – Generative Artificial Intelligence in Finance: Risk Considerations
CI 3 – Artificial Intelligence and Bank Supervision	CI 3 – Artificial intelligence and the economy: implications for central banks
CI 4 – Financial Risk Management and Explainable, Trustworthy, Responsible AI	CI 4 – Interest Rate Risk Management by EME Banks
CI 5 – Artificial Intelligence Risk Management Framework	CI 5 – Laying a robust macro-financial foundation for the future
CI 6 – Climate-Related Risk Drivers and their Transmission Channels	CI 6 – The Last Mile: Financial Vulnerabilities and Risks, Reading 2: The Rise and Risks of Private Credit
CI 7 – Climate-Related Financial Risks – Measurement Methodologies	CI 7 – Monetary and fiscal policy: safeguarding stability and trust
CI 8 – Principles for the Effective Management and Supervision of Climate-Related Financial risks	CI 8 – Regulating the Crypto Ecosystem: The Case of Unbacked Crypto Assets
CI 9 – The Crypto Ecosystem: Key Elements and Risks

THEMATIC SHIFT

2026 CI emphasizes:

• AI and macro-financial stability
• Monetary and fiscal coordination
• Private credit risks
• Crypto regulation
• Emerging market interest rate risk

This reflects CI’s role as a rotating, policy-driven module, not cumulative knowledge.

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NET CURRICULUM SUMMARY

Category	Count
New readings added	11
Readings deleted	10
Total readings	104
LOs added	1
LOs deleted	2
LOs modified	7

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CANDIDATE ACTION PLAN

MUST UPDATE

• Market Risk – New readings + revised learning objectives
• Current Issues – Nearly complete content refresh

TARGETED REVIEW

• Liquidity Risk – Drop deleted LO, update scope on illiquids
• Credit Risk – Add RWA estimation emphasis

NO CHANGE REQUIRED

• Operational Risk
• Investment Management (structure unchanged)

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FINAL TAKEAWAY

The 2026 FRM Part II curriculum represents a controlled evolution, not a rewrite.

• Market Risk deepens technical rigor
• Current Issues rotates to reflect real-time systemic risks
• All other subjects remain structurally stable

Candidates should update selectively, not indiscriminately, focusing effort where GARP clearly signaled new expectations.

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