ECB Consults on Guide on Qualifying Holding Procedures for Banks

This guide is an effort to increase transparency toward market participants in explaining what the ECB supervisory practices are when assessing the acquisition of qualifying holdings. It builds on the applicable legal framework and on experience gained over the years in assessing such type of transactions. The guide explains who is obliged to undergo qualifying holding assessments, the documentation required to apply, and how ECB assesses these transactions. The guide also provides information on complex acquisition structures, the application of the principle of proportionality, and specific procedural elements. The guide will complement the ECB Guide on the supervisory approach to consolidation in the banking sector and provides further clarifications on the overall approach, supervisory expectations, key prudential aspects arising within consolidation projects, and the ongoing supervision of the newly combined entities resulting from such transactions.

The guide is not legally binding and seeks to provide a practical tool to support proposed acquirers and all entities involved in the process of acquiring or increasing qualifying holdings, to ensure procedures and assessments run smoothly and efficiently. A shareholder owning 10% or more of a given bank, or exercising significant influence over it, is said to hold a “qualifying holding.” Prior ECB authorization is needed to acquire a qualifying holding or to pass certain thresholds—for example, 20%, 30%, or 50% of capital or voting rights of a bank. Qualifying holding acquisitions are typically triggered by merger and acquisition projects. ECB plans to update the guide regularly to reflect new developments and experience gained in practice.

Related Links

• Press Release
• Guide (PDF)

Keywords: Europe, EU, Banking, Qualifying Holding Procedures, Proportionality, Guideline, Banking Consolidation, Mergers and Acquisitions, ECB