Question ID:
Legal Act:
Directive 2013/36/EU (CRD)
Other issues
Annex 1 to Directive 2013/36/EU
Point 2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Law firm
Subject Matter:
Is operational leasing included in annex 1 to Directive 2013/36/EU and shall it be included in a consolidated situation?

Shall companies that have operational leasing as activity be seen as a financial institution in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (“The Regulation”) and should it be included in a consolidated situation?

Background on the question:

A specific company (“The Company”) is governed under the Swedish Financial Supervisory Authority. Owing to the fact that a new concept is established in one of the Company’s daughter company (“The Daughter Company”), the question rises whether The Daughter Company will be regarded as an Institute and will be included in a consolidated situation. The new concept that will be established implies that The Daughter Company will rent vehicles under a period of 12 (twelve) or 24 (twenty-four) months to a group of persons or companies (operational leasing). This group of persons and companies will create a car pool and will together utilize the vehicle under the rental period. In order for a company to be included in a consolidated situation the specific company must be seen as an institute or a financial institution. An institute is a credit institute or a value paper company. A credit institute is a bank or a credit market company. Before the new legislation it was stated that a financial institution is a company which is not an institute but whose activities covered in the Swedish Act (2004:297) of banking and finance law. In act (2004:297) of banking and finance law it was stated that financial activity is, among other things, participation of financing, for example leasing. This would lead to, before the new legislation, that the rule that governs consolidated situations will be applicable on all leasing activities. Today Regulation (EU) No 575/2013 is applicable. In section 1 article 4 in The Regulation definitions are stated. Under paragraph 26, one will find the definition of financial institution. In the definition it is stated that financial institution means an undertaking other than an institution, the principal activity of which is to acquire holdings or to pursue one or more of the activities listed in points 2 to 12 and point 15 of Annex I to Directive 2013/36/EU, including a financial holding company, a mixed financial holding company, a payment institution within the meaning of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market ( 1 ), and an asset management company, but excluding insurance holding companies and mixed-activity insurance holding companies as defined in point (g) of Article 212(1) of Directive 2009/138/EU. In the annex to the Directive 2013/36/EU under point 2 financial leasing (solely) is stated as an activity that will be covered under a financial institution. This shall be interpreted, in our understanding, that activities with operational leasing solely will not create a consolidated situation between The Company and The Daughter Company.

Date of submission:
Published as Final Q&A:
Final Answer:
Annex I of Directive 2013/36/EU, to which Article 4(1)(26) of Regulation (EU) No 575/2013 (CRR) refers for identifying financial institutions, provides for an exhaustive list of activities.
Operational leasing is not included in the list. It follows that an entity which carries out exclusively operational leasing cannot be considered as a financial institution and shall not be included in a consolidated situation (foreseen in Article 18 of Regulation (EU) No 575/2013).
However, this does not prevent an entity that, besides the operational leasing activities, carries out other activities listed in Annex I points 2 to 12 and 15 of Directive 2013/36/EU to be defined as a financial institution and to be included in a consolidated situation.
This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for 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.
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 Directive 2013/36/EU (CRD).