Featured Product

    EBA Proposes Guidelines for Establishing Intermediate Parent Entities

    January 15, 2021

    EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive. The guidelines specify the methodology to calculate the total value of assets in EU of the third-country groups and clarifies how to monitor this value to meet the intermediate EU parent undertaking requirement. The guidelines apply to EU-authorized credit institutions and investment firms, which are part of third-country groups and third-country branches. The consultation period on these guidelines ends on March 15, 2021.

    The guidelines stipulate that, in accordance with Article 21b of the Capital Requirements Directive, institutions belonging to third-country groups with a total value of assets in EU of the group equal to or greater than EUR 40 billion must establish an intermediate EU parent undertaking. To take into account the fluctuation in the value of assets, these guidelines specify that the total value of assets in EU of the third-country group should be calculated as an average over the last four quarters. Institutions belonging to third-country groups should monitor the total value of assets in EU on a quarterly basis and communicate the outcomes to relevant competent authorities. In addition, to meet the intermediate EU parent undertaking requirement in a timely manner, they should apply a forward-looking approach by assessing, at least annually, whether the threshold is expected to be breached within the three-year horizon, based on the strategic planning of the third-country group and the projections of assets.

    The guidelines also cover certain procedural aspects related to the monitoring of the threshold by competent authorities and the establishment of the intermediate EU parent undertaking, where necessary. The guidelines clarify that the notifications are to be provided to EBA on an annual basis. For the purpose of both the quarterly assessments and the annual forward-looking monitoring, institutions and branches belonging to a third-country group should exchange all the necessary information with each other. In addition, certain exceptional situations are specified where competent authorities may specify appropriate timelines for the establishment of an intermediate EU parent undertaking, no longer than up to two years from reaching the threshold. Relevant competent authorities should coordinate and take necessary measures to ensure adequate implementation of the intermediate EU parent undertaking requirement.


    Related Links

    Comment Due Date: March 15, 2021

    Keywords: Europe, EU, Banking, Third Country Institutions, CRR, CRD, Intermediate Parent Undertakings, IPU, Reporting, Basel, EBA

    Featured Experts
    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582