Publication
Passporting for Credit Institutions
Published on
Last updated on
Published on
Last updated on
Being granted a banking licence authorisation in one Member State opens the possibility that a credit institution can passport throughout the rest of the European Union without the need to establish a subsidiary in another Member State.
Passporting can be affected through either the establishment of a branch in another Member State (subject to notifying the home member state) or by the provision of services in another Member State (i.e. services are provided in another Member State but no physical presence is established in that State), also subject to notification requirements.
In accordance with Article 35 of the Capital Requirements Directive 2013/36/EC (CRD IV) any EEA credit institution wishing to exercise the freedom to provide services within another EEA Member State by establishing a branch shall notify the competent authorities of the home Member State of their intention to do so.
In accordance with Article 39 of CRD IV any EEA credit institution wishing to exercise the freedom to provide services on a cross border basis within another EEA Member State shall notify the competent authorities of the home Member State of their intention to do so.
The introduction of the Single Supervisory mechanism (SSM) has resulted in a change in the identities of the authorities carrying out the tasks of the home and host state regulator referred to above. The SSM Framework Regulation defines the roles of the ECB and the National Competent Authority (NCA) with regard to the right to establish a branch or the Freedom to provide services in this regard. SSM has created a number of passporting regimes such as Passporting within the SSM, Incoming passporting from outside the SSM and Outgoing passporting from inside the SSM.
For credit institutions within the SSM wishing to establish a branch /provide services outside the SSM; the ECB will be the home authority for significant banks and the NCA for less significant banks.
For credit institutions outside of the SSM wishing to establish a branch/provide services inside the SSM; the ECB will be the host authority where a branch is significant while the NCA will be the host for a less significant branch.
For credit institutions within the SSM wishing to establish a branch /provide services within the SSM; the ECB will be the home authority for significant banks and the NCA for less significant banks.
The Central Bank of Ireland will be the NCA in the appropriate circumstances outlined above.