FRM Part II Curriculum Changes: 2026 vs 2025

This document provides a comprehensive, subject-by-subject analysis of the 2026 FRM Part II curriculum changes compared with 2025. It highlights additions, removals, relocations, renumbering, and learning objective (LOS) wording changes across all six subject areas, based on GARP’s published curriculum and learning objectives.

---

Executive Summary: What Changed

Overall Scope

• Total readings: 104 (2025) → 107 (2026)
• Net change: +3 readings
• Exam weights: Unchanged across all six subjects

The 2026 update is a targeted evolution, not a full rewrite. However, changes are highly concentrated, with substantial revisions in Investment Management and Current Issues, moderate streamlining in Liquidity & Treasury Risk, and minimal or no changes elsewhere.

---

Concentration of Changes by Subject

Subject	Nature of Change
Investment Management (IM)	Major overhaul: expands from 11 to 17 readings (+6). New focus on private markets, governance, applied risk tools, and due diligence. Includes readings moved from CI and LTR.
Current Issues (CI)	Large annual rotation: 8 readings total; 5 new, 3 retained (renumbered). Several 2025 readings removed; private credit relocated to IM.
Liquidity & Treasury Risk (LTR)	Streamlined: reduced from 19 to 17 readings due to one removal, one relocation, and one LOS deletion.
Market Risk (MR)	Structurally stable: 18 readings unchanged; one LOS wording adjustment only.
Credit Risk (CR)	Structurally stable: 23 readings unchanged; one LOS wording refinement only.
Operational Risk & Resilience (ORR)	No changes: reading count and LOS fully unchanged.

---

Exam Weights: Complete Stability

Subject	Weight	Status
Market Risk	20%	Unchanged; one minor LOS wording edit
Credit Risk	20%	Unchanged; one LOS refinement
Operational Risk & Resilience	20%	Unchanged; no curriculum or LOS changes
Liquidity & Treasury Risk	15%	Unchanged; streamlined readings
Investment Management	15%	Unchanged weight; major content expansion
Current Issues	10%	Unchanged; significant annual rotation

Key implication: Strategic study time allocation by weight remains the same, but content coverage within IM and CI changes materially.

---

Change Classification Framework

We classify curriculum updates as follows:

• Reading Added – New examinable content introduced
• Reading Removed – Reading removed entirely from Part II
• Reading Moved – Reading relocated to a different subject area
• Reading Replaced – Old reading removed and substituted with a new source
• Renumbered – Same content, updated codes due to list changes
• LOS Edit – Learning objective wording revised, added, or deleted

---

Market Risk (MR): Minimal LOS Alignment Only

• Reading count: 18 (unchanged)
• Reading changes: None
• Confirmed LOS edit:
  • MR-1 wording changes from “VaR using return distributions” to “VaR using asset price distributions.”

Practical impact: Minimal. Candidates should align terminology in notes and practice questions to 2026 wording.

---

Credit Risk (CR): One Targeted Refinement

• Reading count: 23 (unchanged)
• Reading changes: None
• Confirmed LOS edit:
  • CR-9 (Altman Z-score): 2026 emphasizes describing the methodology and applying it to predict default, without the same explicit emphasis on naming the underlying statistical technique.

Practical impact: Small. Focus on describing and applying the Z-score model rather than over-emphasizing linear discriminant analysis terminology.

---

Operational Risk & Resilience (ORR): No Changes

• Reading count: 24 (unchanged)
• LOS changes: None

Practical impact: 2025 ORR study materials remain fully valid for 2026 preparation.

---

Liquidity & Treasury Risk (LTR): Targeted Streamlining

Reading Changes

• Removed: Managing and Pricing Deposit Services
• Moved: Illiquid Assets (Andrew Ang) → Investment Management

Net effect: 19 → 17 readings

Learning Objective Changes

• One LOS deleted within Liquidity and Reserves Management (legal reserve calculation).

Practical impact:
Most 2025 LTR material remains usable. Candidates should remove the deleted reading, move illiquid assets to IM preparation, and exclude the deleted LOS.

---

Investment Management (IM): Epicenter of Change

• Reading count: 11 → 17 (+6; ~55% increase)

Direction of Change

• Greater emphasis on:
  • Hedge fund governance and practitioner frameworks
  • Private markets and private capital
  • Applied risk tools (scenario analysis, stress testing, monitoring)
  • Updated fraud and due-diligence case content

Content Moved into IM

• From CI: Private credit
• From LTR: Illiquid Assets (Andrew Ang)

Practical impact:
Candidates relying on 2025 IM materials will face significant gaps. IM must be prepared using 2026-specific readings.

---

Current Issues (CI): Annual Rotation Continues

• Total readings (2026): 8
  • 3 retained from 2025 (renumbered)
  • 5 new
  • 6 removed from CI (one relocated to IM)

Thematic Focus in 2026

• Artificial intelligence and financial stability
• Geopolitical risk and fragmentation
• Tokenization
• Crypto regulation
• Monetary–fiscal policy coordination
• Digital resilience (retained)

Practical impact:
CI should be treated as fresh preparation each year. Reuse only content where the same readings explicitly carry forward.

---

Net Curriculum Summary

Category	Outcome
Total readings	104 → 107
Net change	+3
Biggest expansion	Investment Management (+6)
Largest rotation	Current Issues (5 new; only 3 retained)
Streamlining	LTR (−2 readings)
Stable subjects	MR, CR, ORR

---

Candidate Action Plan

Must Update Completely

• Investment Management (IM): Major expansion and reframing
• Current Issues (CI): Significant annual rotation

Targeted Updates Required

• Liquidity & Treasury Risk (LTR): Remove one reading, relocate illiquid assets to IM, drop deleted LOS
• Market Risk (MR): Align to single LOS wording change
• Credit Risk (CR): Align to updated Altman Z-score LOS emphasis

No Change Required

• Operational Risk & Resilience (ORR): 2025 materials fully reusable

---

Final Takeaway

The 2026 FRM Part II curriculum is not a wholesale rewrite, but it is strategically concentrated in its changes:

• Investment Management is materially expanded and modernized
• Current Issues rotates heavily, as expected
• Liquidity & Treasury Risk is streamlined and clarified
• Market Risk and Credit Risk require only minor LOS alignment
• Operational Risk & Resilience remains unchanged

Exam weights remain identical. Study time allocation by subject should stay the same, but within IM and CI, candidates must redirect focus entirely to 2026 readings.