- Question ID
-
2015_1789
- Legal act
- Directive 2014/59/EU (BRRD)
- Topic
- Intra-group financial support
- Article
-
25
- Paragraph
-
1, 6
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
1
- Type of submitter
-
Competent authority
- Subject matter
-
Notification of stakeholders in the context of intra-group financial support
- Question
-
What is the scope of the obligations imposed by Articles 25(1) and 25(6) of Directive 2014/59/EU (BRRD)?
- Background on the question
-
Article 25(1) of the BRRD requires the management body of any entity that intends to provide support in accordance with a group financial support agreement to notify various stakeholders, but Article 25(6) only requires the management body of ‘institutions’ to notify the actual decision to provide support.
- Submission date
- Final publishing date
-
- Final answer
-
The duty of notification and transmission under Article 25 (1) and (6) refers to an intra-group financial support (IGFS) agreement within the meaning of the IGFS Chapter.
The different wording that has been used, entities versus institution, stems from Article 19(1) of the BRRD and refers to the fact that, the group entity providing financial support does not necessarily have to be an institution. According to Article 19(1) of the BRRD it may be "a parent institution in a Member State, a Union parent institution, or an entity referred to in point (c) or (d) of Article 1(1) and its subsidiaries in other Member States or third countries that are institutions or financial institutions covered by the consolidated supervision of the parent undertaking".
The "subsidiaries" mentioned in Article 19(1) may also be those of "a parent institution in a Member State" and "a Union parent institution". This broad understanding of "subsidiary" is also suggested by Article 19(5)(a).Under Article 19(1), the subsidiaries providing financial support need to be "institutions or financial institutions".
Therefore, whenever in the IGFS Chapter the providing entity is called "[group] entity" or "institution" it should be read:
- a parent institution in a Member State; or
- a Union parent institution; or
- an entity referred to in point (c) or (d) of Article 1(1); or
- a subsidiary of any of the aforementioned parent undertakings that is an institution or a financial institution.
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) 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 been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.