EBA consults on its new Guidelines on the monitoring of the threshold for establishing an intermediate EU parent undertaking

The European Banking Authority (EBA) launched today public consultations on its new Guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate EU parent undertakings (IPU) as laid down in the Capital Requirements Directive (CRD). This guidance specifies the methodology to calculate the total value of assets in the Union of the third-country groups and clarifies how to monitor this value in order to meet the IPU requirement. The consultation runs until 15 March 2021.

In accordance with Article 21b of the CRD, institutions belonging to third-country groups with a total value of assets in the Union of the group equal to or greater than EUR 40 billion must establish an intermediate EU parent undertaking (IPU). In order to take into account the fluctuation in the value of assets, these Guidelines specify that the total value of assets in the Union of the third-country group should be calculated as an average over the last four quarters.

Institutions belonging to third-country groups should monitor the total value of assets in the Union on a quarterly basis and communicate the outcomes to relevant competent authorities. In addition, in order to meet the IPU requirement in a timely manner, they should apply a forward-looking approach by assessing, at least annually, whether the threshold is expected to be breached within the three-year horizon, based on the strategic planning of the third-country group and the projections of assets.

The guidance is provided also on certain procedural aspects related to the application of the IPU requirement, including exchange of information between the institutions, third-country branches and competent authorities, as well as appropriate timelines for the establishment of an IPU.

Consultation process

Comments to the two consultations can be sent to the EBA by clicking on the "send your comments" button on the respective consultation page. Please note that the deadline for the submission of comments is 15 March 2021.

A public hearing will take place on 26 February 2021 from 11:00 to 12:30.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis, background and next steps

These draft Guidelines have been developed in accordance with Article 16 of Regulation (EU) No 1093/2010 with a view to establishing consistent, efficient and effective supervisory practices and to ensuring the common, uniform and consistent application of Union law.

The EBA Guidelines will apply to competent authorities across the EU, as well as to financial institutions belonging to third-country groups and operating in the Union.