EBA consults on draft RTS on proposed acquisitions of credit institutions

The European Banking Authority (EBA) has published a consultation paper and accompanying press release, on draft regulatory technical standards (RTS) under the Capital Requirements Directive (CRD as amended by CRD IV). The draft RTS specify the minimum information that must be provided to competent authorities when notifying about proposed acquisitions of qualifying holdings in credit institutions. The aim is to standardise the notification process across the EU, ensuring a consistent application against the five assessment criteria set out under CRD.

In line with these criteria, the draft RTS outlines a request for information that includes: (i) the proposed acquirer's (legal or natural) identity, reputation, financial soundness and financial/non-financial interests in the target institution; (ii) the reputation, knowledge, skills and experience of proposed management body members; (iii) the acquirer's plans for sound and prudent management, including strategy, prudential ratio estimates and new group structure; and (iv) legitimate sources of acquisition funding, including borrowed funds, asset sales and fund transfer channels, to assess suspicion of money laundering or terrorist financing risk. The draft RTS incorporate the principle of proportionality, requiring only information commensurate with the size of the holding and the acquirer's influence. It also avoids duplication by exempting submissions of data already held by competent authorities, including within the Banking Union. Responses to the EBA's proposals may be submitted until 18 September. A public hearing will be held on 15 July.

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