Question ID:
2014_1502
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Transparency and Pillar 3
Article:
13
Paragraph:
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
-
Disclose name of institution / entity:
No
Type of submitter:
Other
Subject Matter:
Disclosure on the basis of consolidated situation of EU parent financial holding company
Question:

According to Article 13(2) of Regulation (EU) No 575/2013 (CRR), institutions controlled by an EU parent financial holding company shall comply with the obligations laid down in Part Eight on the basis of the consolidated situation of that financial holding company. In the case where a parent financial holding company has control over two separate institutions in different member states (without any equity holdings between these two institutions), are both of these institutions obliged to disclose information laid down in Part Eight on the basis of consolidated situation of the parent financial holding company? If yes, is there possibility that one of aforementioned institutions can “outsource” disclosure obligations on the basis of consolidated situation of the parent financial holding company to the other?

Background on the question:

It is not clear to us, whether our institution is obliged to disclose the same set of information (on the basis of our EU parent financial holding company) as another institution in the member state, that is controlled by the same parent financial holding company.

Date of submission:
29/09/2014
Published as Final Q&A:
24/04/2015
Final Answer:

Section 1 of Chapter 2 in Title II of Part One of Regulation (EU) No 575/2013 (CRR) is silent on how to apply the prudential requirements set out in the CRR and Directive 2013/36/EU (CRD) on a consolidated basis where institutions authorised in two or more Member States have as their parent the same EU parent financial holding company or the same EU parent mixed financial holding company. However, the following principles, which are based on Articles 11 and 13 of CRR and Article 111 of CRD, govern the application of prudential requirements to banking groups on a consolidated basis and the consolidated supervision of these groups:

  • The supervision of a banking group on a consolidated basis is exercised only by one consolidating supervisor which is designated in accordance with Article 111 of the CRD;
  • Only one institution of the banking group within the EU is required to meet the prudential requirements on a consolidated basis;
  • The consolidating supervisor is the competent authority that authorised the institution which is required to comply with the prudential requirements on a consolidated basis;
  • Banking groups are subject to the same treatment irrespective of whether the parent of the banking group is an EU parent institution, an EU parent financial holding company or an EU parent mixed financial holding company.

These principles imply that:

  • Only one institution among those controlled by an EU parent financial holding company or an EU parent mixed financial holding company is required to comply with the disclosure requirements laid down in Part Eight of the CRR on the basis of the consolidated situation of that financial holding company or mixed financial holding company; this ensures the application of the same treatment as the one set out in Article 13(1) of the CRR where only one institution -  the EU parent institution - is required to comply with disclosure requirements on a consolidated basis;
  • The institution which is required to comply with the disclosure requirements on a consolidated basis shall be the institution in the Member State in which the financial holding company or mixed financial holding company is established;
  • Where two or more institutions have as their parent the same financial holding company or mixed financial holding company and none of those institutions has been authorised in the Member State in which the financial holding company or mixed financial holding company is established, the institution subject to disclosure requirements on a consolidated basis is the one with the largest balance sheet total.

     

DISCLAIMER

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status:
Final Q&A
Answer prepared by:
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A:

Update 26.03.2021: This Q&A has not yet been reviewed by the European Commission in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR).

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