Response to consultation on Regulatory Technical Standards specifying the minimum list of information to be provided to the competent authorities at the time of the notification
Question 1: Do you agree with the information request laid down in Article 1 and with the granularity envisaged for the information to be provided by proposed acquirers that are trusts, AIF or UCITS management companies or sovereign wealth funds?
Specific point referenced: Article 1 — scope and granularity for non‑standard acquirer types.
Position: Generally agree, with a recommendation to add an optional, standardised NFR annex based on Risk Units (RUs) to improve comparability across heterogeneous structures.
Rationale: Article 1 usefully clarifies identity, governance and funding. However, complex vehicles (trusts, fund managers, SWFs) can mask operational, outsourcing and ICT dependencies that are hard to compare using prose alone. A concise RU summary converts narrative into additive, comparable evidence of accepted non‑financial risk without altering the five prudential tests.
Evidence / examples: In prior supervisory consultations and pilots, a one‑page RU summary (RU_INH, RU_RES, RMI, top‑3 concentrations, YoY change) improved cross‑case triage and consistency of follow‑up questions, particularly where control chains were indirect.
Alternative regulatory choice: Keep Article 1 intact but publish a voluntary RU annex template (Annex D). Where a fund/manager has negligible influence, allow a signed statement in lieu of the annex.
Implementation notes: Annex length: 1 page; reuse permitted between filings; optional CSV/XML where helpful.
Question 2: With regard to the information for the assessment of the sound and prudent management of the target institution, do you agree with the proportionate approach set out in Articles 8, 9 and 10 that reflect the envisaged influence that will be exercised by the proposed acquirer on the target institution?
Specific point referenced: Articles 8–10 — information calibrated to <20%, 20–50%, ≥50% holdings / influence.
Position: Agree, and propose calibrating the depth of the optional RU annex to the same buckets:
- <20%: RU summary + top‑3 concentrations and YoY movement.
- 20–50%: RU by business line + a 90‑day integration plan (owners, dates, targeted control uplift).
- ≥50%: Full RU inventory (entity → BL → process) + 12–24‑month reduction plan and linkage to prudential projections.
Rationale: Mirrors the RTS’s proportionality logic while replacing purely narrative assertions with comparable, decision‑useful evidence. Supervisors retain full discretion on the five tests; the annex raises quality, not quantity.
Evidence / examples: In M&A due‑diligence, bucketed RU packs shortened iterative Q&A and helped condition approvals on targeted mitigations instead of generic governance asks.
Alternative regulatory choice: Launch a 12‑month voluntary pilot for the RU annex using Annex D’s schema; review uptake and usefulness before considering mandatory inclusion.
Drafting suggestion (optional): Add to Articles 8–10: “Competent authorities may request or acquirers may voluntarily provide a standardised non‑financial risk annex proportionate to the envisaged influence.”
Question 3: a) Do you agree with the proportionate approach set out in Article 11, relating to the submission of reduced information where the proposed acquirer has already been assessed for the acquisition of qualifying holdings or is a supervised entity under Union financial sector law?
Specific point referenced: Article 11 — (a) proportionate approach to reduced information for acquirers already assessed / already supervised; and (b) whether exemptions under paragraphs (2) and (3) should apply only to significant institutions (SIs) or also when the proposed acquirer or target is an LSI.
Recently assessed / already supervised acquirers
Position: Support reduced‑information route, provided the file includes a “delta‑update” RU pack (net RU change, top‑3 concentrations, material control changes since last assessment).
Rationale: Preserves efficiency while avoiding blind spots in accepted non‑financial risk.
Alternative: Define a non‑binding materiality trigger (illustrative): reduced route not available if |Δ RU_RES| > 10% YoY or top‑3 > 45% of RU_RES.
Question 3: b) With specific regard to the exemptions under paragraphs (2) and (3), do you agree to their application only in case of significant institutions or should the exemption cover also the cases where the proposed acquirer or the target respectively are less significant institutions?
Exemptions under 11(2) & 11(3) — SIs only, or also LSIs (for acquirer or target)?
Position: Do not limit to SIs only. Allow LSIs on both sides (acquirer and target) where the RU delta‑pack shows stability and no emerging concentrations; revert to the full information set if guardrails are breached.
Rationale: Proportionality should be risk‑based, not status‑based. Using a simple, standard metric keeps decisions auditable and consistent across sizes while preventing over‑burdening low‑risk LSIs.
Illustrative guardrails: reduced route unavailable if any of the following hold: (i) |Δ RU_RES| > 10% YoY; (ii) top‑3 concentrations > 45% of RU_RES; (iii) a new dependency (e.g., critical third‑party/ICT) lacks documented controls; or (iv) significant governance changes are planned without dated mitigations.
Implementation notes: Delta‑update length ≤1 page; reuse the prior annex with highlights; make working papers available on request.
Question 4: Do you agree with the simplification in the case of complex acquisition structures described in Article 12?
Specific point referenced: Article 12 — simplifications where acquisition chains are complex.
Position: Agree, with the addition of a one‑page pre/post RU heat‑map to make residual‑risk flows legible across entities and business lines.
Rationale: Complex chains generate long narratives. A compact RU roll‑up (entity → BL → process) surfaces concentrations and control pathways at a glance.
Alternative regulatory choice: Permit a CSV/XML option for the heat‑map (fields: entity, BL, process, RU_INH, RMI, RU_RES, rank) to aid supervisory ingestion and analytics.
Example (illustrative):
Entity Business line (BL) RU_RES_T0 RU_RES_T12
HoldCo Payments 420 330
Bank‑EU Ops Control 280 210
Bank‑US Data Mgmt 356 242
Question 5: Do you find the provisions of this draft Regulation sufficiently clear and comprehensive?
Specific point referenced: Question 5 — clarity and completeness of the provisions.
Position: Clear and aligned to mandate. However, outcomes risk remaining subjective if dossiers stay narrative‑heavy. Introduce a voluntary RU annex and a delta‑update mechanism (Art. 11) to anchor proportionality in measured risk.
Rationale: Low‑friction additions that improve cross‑case comparability without touching Level‑1 tests. They also support streamlined resubmissions and consistent conditions where concentrations persist.
Success metrics EBA could track (post‑implementation): (i) median time from notification to decision; (ii) proportion of cases cleared with no RFIs; (iii) share using delta‑updates; (iv) variance of follow‑up asks across similar cases.
Alternative: Time‑boxed pilot (12 months) with a short post‑mortem on usefulness for supervisors and filers.