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    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    July 28, 2021

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD). The guidelines specify how third-country groups should calculate and monitor the total value of their assets in EU to ensure timely application of the requirements for intermediate parent undertakings. The guidelines apply to the EU-authorized credit institutions and investment firms that are subsidiaries of third-country groups, as defined in Article 3(1), point (64) of the CRD, and to the branches referred to in Article 21b(5), point (b) of the CRD.

    The CRD introduced a requirement for institutions that are part of third-country groups to have an intermediate EU parent undertaking established in EU, where the total value of assets in EU of the third-country group is equal to or greater than EUR 40 billion. These guidelines:

    • Clarify the relevant data for the calculation of the total value of the assets in EU, taking into account the fluctuation in the value of assets
    • Specify that for the purpose of the application of the intermediate EU parent undertakings requirement, the total value of assets in  of the third-EU country group should be calculated as an average over the last four quarters. This value should be monitored on a quarterly basis and communicated to relevant competent authorities.
    • Note that institutions belonging to third-country groups must apply a forward-looking approach, to meet the intermediate and specify that they should assess at least annually whether the threshold is expected to be reached within the three-year horizon, based on the strategic planning of the third-country group and the forecast of assets. 
    • Stipulate that, 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 among each other all necessary information.
    • Specify certain procedural aspects related to the monitoring of the threshold by competent authorities and the establishment of the intermediate EU parent undertakings where necessary; for instance, clarification is provided on the notifications to be provided to EBA on an annual basis. In addition, certain exceptional situations are specified where competent authorities may identify appropriate timelines for the establishment of an intermediate EU parent undertakings, no longer than up to two years from reaching the threshold.


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    Keywords: Europe, EU, Banking, Securities, Investment Firms, Third-Country Groups, Intermediate Parent Undertakings, CRD, EBA

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