The European Central Bank (ECB) is consulting, until November 09, 2022, on the guide that aims to clarify how ECB assesses applications to acquire qualifying holdings in banks. The final version of the guide is intended to function as a user-friendly handbook for banks, investors and other stakeholders involved in bank acquisitions.
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.
Keywords: Europe, EU, Banking, Qualifying Holding Procedures, Proportionality, Guideline, Banking Consolidation, Mergers and Acquisitions, ECB
Previous ArticleOCC Revises Retail Lending Booklet of Comptroller's Handbook
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.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
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.
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.
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
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.