Changes from report parliamentary committee draft to plenary report

Added1. Member States shall require third country branches to periodically report to their competent authorities information on:

Added(a) the assets and liabilities held on their books in accordance with Article 48i or originated by the third country branch, with a breakdown that singles out:

Added(i) the largest recorded assets and liabilities classified by sector and counterparty type (including, in particular, financial sector exposures);

Added(ii) significant exposure and funding source concentrations to specified types of counterparties;

Added(iii) significant internal transactions with the head undertaking and with members of the head undertaking’s group;

Added(b) the third country branch’s compliance with the requirements that apply to them under this Directive;

Added(c) on an ad hoc basis, the deposit protection arrangements available to depositors in the third country branch in accordance with Article 15(2) and (3) of Directive 2014/49;

Added(d) additional regulatory requirements imposed on the third country branch by Member States under national law.

AddedFor the purposes of reporting the information on the assets and liabilities held on their books in accordance with point (a), third country branches shall apply the international accounting standards adopted in accordance with the procedure laid down in Article 6(2) of Regulation (EC) No 1606/2002*10 or the applicable GAAP in the Member State.

Added2. Member States shall require third country branches to report to their competent authorities the following information on their head undertaking:

Added(a) on a periodic basis, aggregated information on the assets and liabilities held or booked, respectively, by the subsidiaries and other third country branches of that head undertaking’s group in the Union;

Added(b) on a periodic basis, the head undertaking’s compliance with its applicable prudential requirements on an individual and consolidated basis;

Added(c) on an ad hoc basis, significant supervisory reviews and assessments when those are conducted on the head undertaking and the consequent supervisory decisions;

Added(d) the recovery plans of the head undertaking and the specific measures that could be taken on the third country branch in accordance with those plans, and any subsequent updates and amendments to those plans;

Added(e) the head undertaking’s business strategy in relation to the third country branch, and any subsequent changes to that strategy;

Added(f) the services provided by the head undertaking to eligible counterparties or professional clients within the meaning of Section 1 of Annex II to Directive 2014/65/EU established or situated in the Union on the basis of reverse solicitation of services in accordance with Article 21c of this Directive;

Added(fa) the cross-border investment services directly provided in the Union by the head undertaking and by the subsidiaries of the head undertaking established in a third country, and the investment services that are provided in the Union by the head undertaking established in a third country on the basis of reverse solicitation.

Added3. The reporting obligations laid down in this Article shall not prevent competent authorities from imposing additional ad hoc reporting requirements on third country branches where the competent authority deems the additional information necessary to gain a comprehensive view of the branch’s or its head undertaking’s business, activities or financial soundness, verify the branch’s and its head undertaking’s compliance with applicable laws and ensure the branch’s compliance with those laws.

Added3a. The competent authorities of third country branches shall share with the competent authorities of the Union subsidiaries of the same third country groups the information obtained in accordance with Article 48l(1) and (2).

Added_______

Added*10 Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (OJ L 243, 11.9.2002, p. 1).’

Added1. EBA shall develop draft implementing technical standards to specify the uniform formats, definitions, the IT solutions and the frequency of reporting to be applied for the purposes of Article 48l.

AddedThe reporting requirements referred to in the first subparagraph shall be proportionate to the classification of third country branches as either class 1 or class 2.

AddedEBA shall submit those draft implementing technical standards to the Commission by [OP please insert the date = 6 months from the date of entry into force of this amending Directive].

AddedPower is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1093/2010.

Added2. The regulatory and financial information referred to in this Article shall be reported at least biannually by class 1 third country branches and at least annually by class 2 third country branches.

Added3. Competent authorities may waive all or part of the requirements to report information on the head undertaking laid out in paragraph 48l(3) for qualifying third country branches, provided that the competent authority is able to obtain the relevant information directly from the supervisory authorities of the relevant third country.

AddedSupervision

Added1. Member States shall require that competent authorities comply with this Section and, mutatis mutandis, with Title VII for the purposes of supervising third country branches.

Added2. Competent authorities shall include third country branches in the supervisory examination programme referred to in Article 99.

Added1. Member States shall require that competent authorities review the arrangements, strategies, processes and mechanisms implemented by third country branches to comply with the provisions that apply to them under this Directive and, where applicable, any additional regulatory requirements under national law.

Added2. On the basis of the review conducted in accordance with paragraph 1, the competent authorities shall evaluate whether the arrangements, strategies, processes and mechanisms implemented by the third country branches and the capital endowment and liquidity held by them ensure a sound management and coverage of their material risks and the viability of the branch.

Added3. Competent authorities shall conduct the review and evaluation referred to in paragraphs 1 and 2 in accordance with the principle of proportionality, as published in accordance with Article 143(1), point (c). In particular, competent authorities shall establish a frequency and intensity for the review referred to in paragraph 1 that is proportionate to the classification as class 1 and 2 third country branches and that takes into account other relevant criteria, such as the nature, scale and complexity of the third country branches’ activities.

Added4. Where a review, in particular the evaluation of the governance arrangements, the business model, or the activities of a third country branch, gives competent authorities reasonable grounds to suspect that, in connection with that third country branch, money laundering or terrorist financing is being or has been committed or attempted, or there is increased risk thereof, the competent authority shall immediately notify EBA and the authority that supervises the third country branch in accordance with Directive (EU) 2015/849. Where there is an increased risk of money laundering or terrorist financing, the competent authority and the authority that supervises the third country branch in accordance with Directive (EU) 2015/849 shall liaise and notify their common assessment immediately to EBA. The competent authority shall take, as appropriate, measures in accordance with this Directive, which may include withdrawing the third country branch’s permission in accordance with Article 48d(2), point (g).

Added5. Competent authorities, financial intelligence units and authorities that supervise third country branches shall cooperate closely with each other within their respective competences and shall exchange information relevant to this Directive, provided that such cooperation and information exchange do not impinge on an on-going inquiry, investigation or proceedings in accordance with the criminal or administrative law of the Member State where the competent authority, financial intelligence unit or authority entrusted with the public duty of supervising third country branches are located. EBA may assist the competent authorities and the authorities in charge of supervising the third country branch in accordance with Directive (EU) 2015/849 in the event of a disagreement concerning the coordination of supervisory activities under this Article on its own initiative. In such an event, EBA shall act in accordance with Article 19(1), second subparagraph, of Regulation (EU) No 1093/2010.

Added6. EBA shall develop draft regulatory technical standards to further specify ▌the common procedures and methodologies for the supervisory review and evaluation process referred to in this Article and for the assessment of the treatment of material risks.

Added▌

AddedFor the purposes of point (a), the procedures and methodologies referred to therein shall be laid down in a manner that is proportionate to the classification of the third country branches as class 1 or class 2, and to other appropriate criteria such as the nature, scale and complexity of their activities.

AddedEBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 12 months from the date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

AddedRegulatory technical standards on cooperation with authorities responsible for supervision of anti-money laundering

AddedEBA shall, after consulting the European Data Protection Board, issue regulatory technical standards on the mechanisms for cooperation and information exchange between competent authorities and:

Added(a) the authorities responsible for supervision of anti-money laundering in the Member State in accordance with Directive (EU) 2015/849 in the context of the application of Articles 27b (2), 48c (4) and 48d (4);

Added(b) the authorities referred to in paragraph 5 of Article 48o, in the context of identifying serious breaches of anti-money laundering rules.

AddedThe EBA shall issue those regulatory technical standards by [OP please insert the date = 12 months from date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

Added1. Competent authorities shall require third country branches to take the necessary measures at an early stage in order to:

Added(a) ensure that the third country branches comply with the requirements that apply to them under this Directive and under national law or to restore compliance with those requirements; and

Added(b) to ensure that the material risks that the third country branches are exposed to are covered and managed in a sound and sufficient manner and that those branches remain viable.

Added2. Competent authorities’ powers for the purposes of paragraph 1 shall include, at least, the power to require third country branches to:

Added(a) hold an amount of capital endowment in excess of the minimum requirements laid down in Article 48e or to comply with other additional capital requirements. Any additional capital endowment amount to be held by the third country branch in accordance with this point shall comply with the requirement laid down in Article 48e;

Added(b) meet other specific liquidity requirements in addition to the requirement laid down in Article 48f. Any additional liquid assets to be held by the third country branch in accordance with this point shall comply with the requirements laid down in Article 48f;

Added(c) reinforce their governance, risk control or booking arrangements;

Added(d) restrict or limit the scope of their business or of the activities they conduct, as well as the counterparties to those activities;

Added(e) reduce the risk inherent in their activities, products and systems, including outsourced activities, and stop engaging or offering such activities or products;

Added(f) comply with additional reporting requirements in accordance with Article 48l(3) or increase the frequency of the regular reporting;

Added(g) make public disclosures;

Added(ga) suspend the authorisation granted in accordance with Article 48c and prohibit engaging in new business.

Added1. Competent authorities supervising third country branches and subsidiary institutions of the same third-country group shall cooperate closely and share information with each other. The competent authorities shall have written coordination and cooperation arrangements in place in accordance with article 115.

Added2. For the purposes of paragraph 1, class 1 third country branches shall be subject to the comprehensive supervision of a college of supervisors in accordance with Article 116, subject to the following requirements: