2014_796 What is meant with 'mainly' in the definition of 'financial holding company'?

Question ID:

2014_796

Legal Act:

Regulation (EU) No 575/2013 (CRR)

Topic:

Other issues

Article:

Paragraph:

Subparagraph:

COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:

Not applicable

Article/Paragraph:

Disclose name of institution / entity:

Type of submitter:

Credit institution

Subject Matter:

What is meant with 'mainly' in the definition of 'financial holding company'?

Question:

A 'financial holding company' is defined as a financial institution, the subsidiaries of which are exclusively or mainly institutions or financial institutions, at least one of such subsidiaries being an institution, and which is not a mixed financial holding company. Could you please provide more guidance on what is meant with 'mainly'?

Background on the question:

In order to define a 'financial holding company' properly we are keen to know when a group of entities (of which at least one is an institution) exists of mainly institutions or financial institutions. This is necessary for the scope of prudential consolidation and the applicability of the provisions of the Regulation (EU) No 575/2013 (CRR) as described in Article 11(2) and 18(1).

Date of submission:

29/01/2014

Published as Final Q&A:

21/11/2014

Final Answer:

The term "mainly" used in Article 4(1)(20) of Regulation (EU) No 575/2013 should be understood to refer to a situation where more than 50% of the equity, consolidated assets, revenues, personnel or another indicator deemed relevant by the competent authority of a holding company are associated with subsidiaries that are institutions or financial institutions.

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).