Response to consultation on RTS and ITS on the authorisation of credit institutions

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Question 1: Do you have any general comments on the draft Regulatory Technical Standards under Article 8(2) of Directive 2013/36/EU or on the draft Implementing Technical Standards under Article 8(3) of Directive 2013/36/EU?

Eurofinas and Leaseurope, the voices of consumer credit and leasing at European level, welcome the opportunity to respond to the European Banking Authority’s (EBA) joint consultation on i) the draft Regulatory Technical Standards (RTS) on the information to be provided for the authorisation of credit institutions, the requirements applicable to shareholders and members with qualifying holdings and obstacles which may prevent the effective exercise of supervisory powers and ii) draft Implementing Technical Standards (ITS) on standard forms, templates and procedures for the provision of the information required for the authorisation of credit institutions.

Our observations are limited to the information requirements for the authorisation of credit institutions.

As a general point, we support the European Banking Authority’s work on this issue. We believe the draft standards are clear and well drafted. We welcome the recognition that the objective is to harmonize the information to be provided to competent authorities and that it is not the EBA’s intention to standardise the actual licensing process, which will remain different across countries.

We also welcome the acknowledgement that it might take some time for both applicants and competent authorities to become familiar with the various requirements. In this context, we think a compliance delay of six months is an absolute minimum.

We would like to draw the EBA’s attention to the following points:

- Competent authorities should be provided with information on governance arrangements including in respect of anti-money laundering and counter terrorist financing. Given the wide scope, technical nature and reputational implications of the latter, we believe there should be further guidance in this field. We think that, failing to indicate what kind of information (e.g. conduct of risk analysis, due diligence requirements, tracking of beneficial owners, etc.) should be reported for the purpose of licensing, will result in diverging implementation across European countries.

- Competent authorities should be provided with information on all administrative penalties, judgement, arbitration as well as any criminal and civil convictions which are relevant to the licensing of the institution.

We take the view that this requirement is too broad. We think the concept of “relevance” is intrinsically subjective and will be understood differently within the various European jurisdictions. We appreciate that it may be difficult to introduce, at this stage, a more precise standard at European level. We would nevertheless recommend indicating that relevance should be determined considering objective criteria such as financial loss, number of transactions concerned, level of sanction etc.

We think this requirement should not include confidential decisions and settlements from non-state justice mechanisms. Confidentiality of private arbitration/transaction should be preserved.

We would also recommend to introduce a reference to the data protection of managers/employees/intermediaries in this specific section.

- We support proportionality in terms of volume of information requested and timing of disclosures. We would also support the introduction of a 12 months sequencing process which could benefit smaller-sized firms and les complex, monoline, specialised business models.

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