Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (Text with EEA relevance)

Member States shall ensure that investment firms provide competent authorities, upon demand, the total remuneration figures for each member of the management body or senior management.

Competent authorities shall forward the information referred to in the first and second subparagraphs to EBA, which shall publish it on an aggregate home Member State basis in a common reporting format. EBA, in consultation with ESMA, may issue guidelines to facilitate the implementation of this paragraph and to ensure the consistency of the information collected.

Article 35

EBA report on environmental, social, and governance risks

EBA shall prepare a report on the introduction of technical criteria related to exposures to activities associated substantially with environmental, social, and governance (ESG) objectives for the supervisory review and evaluation process, with a view to assessing the possible sources and effects of risks on investment firms, taking into account applicable Union legal acts in the field of ESG taxonomy.

The EBA report referred to in the first paragraph shall comprise at least the following:

• (a) a definition of ESG risks, including physical risks and transition risks related to the transition to a more sustainable economy, and, with regard to transition risks, including risks related to the depreciation of assets due to regulatory change, qualitative and quantitative criteria and metrics relevant for assessing such risks, as well as a methodology for assessing the possibility of such risks arising in the short, medium, or long term and the possibility of such risks having a material financial impact on an investment firm;

• (b) an assessment of the possibility of significant concentrations of specific assets increasing ESG risks, including physical risks and transition risks for an investment firm;

• (c) a description of the processes by means of which an investment firm can identify, assess, and manage ESG risks, including physical risks and transition risks;

• (d) the criteria, parameters and metrics by means of which supervisors and investment firms can assess the impact of short‐, medium‐ and long‐term ESG risks for the purposes of the supervisory review and evaluation process.

EBA shall submit the report on its findings to the European Parliament, to the Council, and to the Commission, by 26 December 2021.

On the basis of that report, EBA may, if appropriate, adopt guidelines to introduce criteria related to ESG risks for the supervisory review and evaluation process that take into account the findings of the EBA report referred to in this Article.

Section 3 Supervisory review and evaluation process

Article 36

Supervisory review and evaluation

• (a) the risks referred to in Article 29;

• (b) the geographical location of an investment firm’s exposures;

• (c) the business model of the investment firm;

• (d) the assessment of systemic risk, taking into account the identification and measurement of systemic risk under Article 23 of Regulation (EU) No 1093/2010 or recommendations of the ESRB;

• (e) the risks posed to the security of investment firms’ network and information systems to ensure confidentiality, integrity and availability of their processes, data and assets;

• (f) the exposure of investment firms to the interest rate risk arising from non‐trading book activities;

• (g) governance arrangements of investment firms and the ability of members of the management body to perform their duties.

For the purposes of this paragraph, competent authorities shall duly take into account whether investment firms hold a professional indemnity insurance.

For the purpose of the first subparagraph, point (a), competent authorities shall assess and monitor developments in the practices of investment firms concerning the management of their concentration risk arising from exposures towards central counterparties, including the plans developed in accordance with Article 29(1) of this Directive as well as the progress made in adapting their business models to the requirements laid down in Article 7a of Regulation (EU) No 648/2012.

Competent authorities shall decide on a case‐by‐case basis whether and in which form the review and evaluation is to be carried out with regard to investment firms that meet the conditions for qualifying as small and non‐interconnected investment firms set out in Article 12(1) of Regulation (EU) 2019/2033, only where they deem it to be necessary due to the size, nature, scale and complexity of the activities of those investment firms.

For the purposes of the first subparagraph, national law governing segregation applicable to client money held shall be considered.

Article 37

Ongoing review of the permission to use internal models

Where it is unlikely that the investment firm will comply by the prescribed deadline or has not satisfactorily demonstrated that the effect of non‐compliance is immaterial, Member States shall ensure that competent authorities revoke the permission to use internal models or limit it to compliant areas or to those areas where compliance can be achieved by an appropriate deadline.

In order to promote consistent, efficient and effective supervisory practices, EBA shall, on the basis of that analysis and in accordance with Article 16 of Regulation (EU) No 1093/2010, develop guidelines with benchmarks on how investment firms are to use internal models and how those internal models are to be applied to similar risks or exposures.

Member States shall encourage competent authorities to take into account that analysis and those guidelines for the review referred to in paragraph 1.

Section 4 Supervisory measures and powers

Article 38

Supervisory measures

Competent authorities shall require investment firms to take, at an early stage, the measures necessary to address the following problems:

• (a) an investment firm does not meet the requirements of this Directive or of Regulation (EU) 2019/2033;

• (b) competent authorities have evidence that an investment firm is likely to breach the national provisions transposing this Directive or the provisions of Regulation (EU) 2019/2033 within the next 12 months.

Article 39

Supervisory powers

• (a) to require investment firms to have own funds in excess of the requirements set out in Article 11 of Regulation (EU) 2019/2033, under the conditions laid down in Article 40 of this Directive, or to adjust the own funds and liquid assets required in case of material changes in the business of those investment firms;

• (b) to require the reinforcement of the arrangements, processes, mechanisms and strategies implemented in accordance with Articles 24 and 26;

• (c) to require investment firms to present, within one year, a plan to restore compliance with supervisory requirements pursuant to this Directive and to Regulation (EU) 2019/2033, to set a deadline for the implementation of that plan and require improvements to that plan regarding scope and deadline;

• (d) to require investment firms to apply a specific provisioning policy or treatment of assets in terms of own funds requirements;

• (e) to restrict or limit the business, operations or network of investment firms or to request the divestment of activities that pose excessive risks to the financial soundness of an investment firm;

• (f) to require the reduction of the risk inherent in the activities, products and systems of investment firms, including outsourced activities;

• (g) to require investment firms to limit variable remuneration as a percentage of net revenues where that remuneration is inconsistent with the maintenance of a sound capital base;

• (h) to require investment firms to use net profits to strengthen own funds;

• (i) to restrict or prohibit distributions or interest payments by an investment firm to shareholders, members or holders of Additional Tier 1 instruments where that restriction or prohibition does not constitute an event of default of the investment firm;

• (j) to impose additional or more frequent reporting requirements to those set out in this Directive and Regulation (EU) 2019/2033, including reporting on capital and liquidity positions;

• (k) to impose specific liquidity requirements in accordance with Article 42;

• (l) to require additional disclosures;

• (m) to require investment firms to reduce the risks posed to the security of investment firms’ network and information systems to ensure confidentiality, integrity and availability of their processes, data and assets;

• (n) to require investment firms to reduce exposures towards a central counterparty or to realign exposures across their clearing accounts in accordance with Article 7a of Regulation (EU) No 648/2012, where the competent authority considers that there is excessive concentration risk arising from exposures towards that central counterparty.

• (a) one of the cases referred to in points (a) and (b) of Article 38 applies;

• (b) the competent authority considers it to be necessary to gather the evidence referred to in point (b) of Article 38;

• (c) the additional information is required for the purpose of the supervisory review and evaluation process referred to in Article 36.

Information shall be deemed to be duplicative where the competent authority already has the same or substantially the same information, where that information is capable of being produced by the competent authority or of being obtained by the same competent authority through other means than a requirement on the investment firm to report it. A competent authority shall not require additional information where the information is available to the competent authority in a different format or level of granularity than the additional information to be reported and that different format or granularity does not prevent it from producing substantially similar information.

Article 40

Additional own funds requirement

• (a) the investment firm is exposed to risks or elements of risks, or poses risks to others that are material and are not covered or not sufficiently covered by the own funds requirement, and especially K‐factor requirements, set out in Part Three or Four of Regulation (EU) 2019/2033;

• (b) the investment firm does not meet the requirements set out in Articles 24 and 26 and other supervisory measures are unlikely to sufficiently improve the arrangements, processes, mechanisms and strategies within an appropriate timeframe;

• (c) the adjustments in relation to the prudent valuation of the trading book are insufficient to enable the investment firm to sell or hedge out its positions within a short period without incurring material losses under normal market conditions;

• (d) the review carried out in accordance with Article 37 shows that non‐compliance with the requirements for the application of the permitted internal models will likely lead to inadequate levels of capital;

• (e) the investment firm repeatedly fails to establish or maintain an adequate level of additional own funds as set out in Article 41.

For the purposes of the first subparagraph, the capital considered to be adequate may include risks or elements of risks that are explicitly excluded from the own funds requirement set out in Part Three or Four of Regulation (EU) 2019/2033.

• (a) at least three quarters of the additional own funds requirement is met with Tier 1 capital;

• (b) at least three quarters of the Tier 1 capital is composed of Common Equity Tier 1 capital;

• (c) those own funds are not used to meet any of the own funds requirements set out in points (a), (b) and (c) of Article 11(1) of Regulation (EU) 2019/2033.

EBA shall ensure that the draft regulatory technical standards include indicative qualitative metrics for the amounts of additional own funds referred to in point (a) of Article 39(2), taking into account the range of different business models and legal forms that investment firms may take, and are proportionate in light of:

• (a) the implementation burden on investment firms and competent authorities;

• (b) the possibility that the higher level of own funds requirements that apply where investment firms do not use internal models justifies the imposition of lower own funds requirements when assessing risks and elements of risks in accordance with paragraph 2.

EBA shall submit those draft regulatory technical standards to the Commission by 26 June 2021.

Power 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.

Article 41

Guidance on additional own funds

Article 42

Specific liquidity requirements

• (a) the investment firm is exposed to liquidity risk or elements of liquidity risk that are material and are not covered or not sufficiently covered by the liquidity requirement set out in Part Five of Regulation (EU) 2019/2033;

• (b) the investment firm does not meet the requirements set out in Articles 24 and 26 of this Directive and other administrative measures are unlikely to sufficiently improve the arrangements, processes, mechanisms and strategies within an appropriate timeframe.

EBA shall submit those draft regulatory technical standards to the Commission by 26 June 2021.

Power 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.

Article 43

Cooperation with resolution authorities

Competent authorities shall notify the relevant resolution authorities of any additional own funds requirement imposed pursuant to point (a) of Article 39(2) of this Directive for an investment firm that falls under the scope of Directive 2014/59/EU and about any expectation for adjustments as referred to in Article 41(2) of this Directive in respect to such investment firm.

Article 44

Publication requirements

Member States shall ensure that the competent authorities have the power to:

• (a) require investment firms that do not meet the conditions for qualifying as small and non‐interconnected investment firms set out in Article 12(1) of Regulation (EU) 2019/2033 and investment firms referred to in Article 46(2) of Regulation (EU) 2019/2033 to publish the information referred to in Article 46 of that Regulation more than once a year and to set deadlines for that publication;

• (b) require investment firms that do not meet the conditions for qualifying as small and non‐interconnected investment firms set out in Article 12(1) of Regulation (EU) 2019/2033 and investment firms referred to in Article 46(2) of Regulation (EU) 2019/2033 to use specific media and locations, in particular the investment firms’ websites, for publications other than the financial statements;

• (c) require parent undertakings to publish annually, either in full or by way of references to equivalent information, a description of their legal structure and governance and organisational structure of the investment firm group in accordance with Article 26(1) of this Directive and with Article 10 of Directive 2014/65/EU.

Article 44a

Accessibility of information on the European single access point

Member States shall ensure that the information complies with the following requirements:

• (a) be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859 or, where required by Union law, in a machine-readable format, as defined in Article 2, point (4), of that Regulation;

• (b) be accompanied by the following metadata:
• (i) all the names of the investment firm or parent undertaking to which the information relates;
• (ii) the legal entity identifier of the investment firm or parent undertaking, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
• (iii) the size of the investment firm or parent undertaking by category, as specified pursuant to Article 7(4), point (d), of that Regulation;
• (iv) the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
• (v) an indication of whether the information contains personal data.

Member States shall ensure that the information complies with the following requirements:

• (a) be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859;

• (b) be accompanied by the following metadata:
• (i) all the names of the investment firm to which the information relates;
• (ii) where available, the legal entity identifier of the investment firm, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
• (iii) the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
• (iv) an indication of whether the information contains personal data.

• (a) any other metadata to accompany the information;

• (b) the structuring of data in the information;

• (c) for which information a machine-readable format is required and, in such cases, which machine-readable format is to be used.

For the purposes of point (c), EBA shall assess the advantages and disadvantages of different machine-readable formats and conduct appropriate field tests for that purpose.

EBA shall submit those draft implementing technical standards to the Commission.

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

Article 45

Obligation to inform EBA

• (a) their review and evaluation process referred to in Article 36;

• (b) the methodology used for decisions referred to in Articles 39, 40 and 41;

• (c) the level of administrative sanctions laid down by Member States, referred to in Article 18.

EBA shall transmit the information referred to in this paragraph to ESMA.

EBA shall publish on its website the aggregated information referred to in point (c) of the first subparagraph of paragraph 1.

EBA shall report to the European Parliament and to the Council on the degree of convergence of the application of this Chapter among Member States. EBA shall conduct peer reviews in accordance with Article 30 of Regulation (EU) No 1093/2010 where necessary. It shall inform ESMA of such peer reviews.

EBA and ESMA shall issue guidelines for the competent authorities in accordance with Article 16 of Regulation (EU) No 1093/2010 and Article 16 of Regulation (EU) No 1095/2010, as applicable, to further specify, in a manner that is appropriate to the size, the structure and the internal organisation of investment firms and the nature, scope and complexity of their activities, the common procedures and methodologies for the supervisory review and evaluation process referred to in paragraph 1 and the assessment of the treatment of the risks referred to in Article 29 of this Directive.

CHAPTER 3 Supervision of investment firm groups

Section 1 Supervision of investment firm groups on a consolidated basis and supervision of compliance with the group capital test

Article 46

Determination of the group supervisor

Article 47

Information requirements in emergency situations

Where an emergency situation arises, including a situation as described in Article 18 of Regulation (EU) No 1093/2010 or a situation of adverse developments in markets, which potentially jeopardises the market liquidity and the stability of the financial system in any of the Member States where entities of an investment firm group have been authorised, the group supervisor determined pursuant to Article 46 of this Directive shall, subject to Section 2 of Chapter 1 of this Title, alert, as soon as practicable, EBA, ESRB and any relevant competent authorities and shall communicate all information essential for the performance of their tasks.

Article 48

Colleges of supervisors

• (a) the tasks referred to in Article 47;

• (b) the coordination of information requests where this is necessary for facilitating supervision on a consolidated basis, in accordance with Article 7 of Regulation (EU) 2019/2033;

• (c) the coordination of information requests, in cases where several competent authorities of investment firms that are part of the same group need to request either from the competent authority of a clearing member’s home Member State or from the competent authority of the QCCP information relating to the margin model and parameters used for the calculation of the margin requirement of the relevant investment firms;

• (d) the exchange of information between all competent authorities and with EBA in accordance with Article 21 of Regulation (EU) No 1093/2010 and with ESMA in accordance with Article 21 of Regulation (EU) No 1095/2010;

• (e) reaching an agreement on the voluntary delegation between competent authorities of tasks and responsibilities, where appropriate;

• (f) increasing the efficiency of supervision by seeking to avoid the unnecessary duplication of supervisory requirements.

• (a) the competent authorities responsible for the supervision of subsidiaries of an investment firm group headed by an Union investment firm, Union parent investment holding company or Union parent mixed financial holding company;

• (b) where appropriate, third‐country supervisory authorities, subject to confidentiality requirements that are equivalent in the opinion of all competent authorities to the requirements laid down in Section 2 of Chapter I of this Title.

The group supervisor shall take account of the relevance of the supervisory activity to be planned or coordinated by the authorities referred to in paragraph 5 when adopting decisions.

The establishment and functioning of the colleges of supervisors shall be formalised by means of written arrangements.

EBA may also assist the competent authorities in the event of a disagreement concerning the functioning of colleges of supervisors under this Article on its own initiative in accordance with the second subparagraph of Article 19(1) of Regulation (EU) No 1093/2010.

EBA shall submit those draft regulatory technical standards to the Commission by 26 June 2021.

Power 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.

Article 49

Cooperation requirements

• (a) identification of the investment firm group’s legal and governance structure, including its organisational structure, covering all regulated and non‐regulated entities, non‐regulated subsidiaries and the parent undertakings, and of the competent authorities of the regulated entities in the investment firm group;

• (b) procedures for the collection of information from the investment firms in an investment firm group, and the procedures for the verification of that information;

• (c) any adverse developments in investment firms or in other entities of an investment firm group, which could seriously affect those investment firms;

• (d) any significant sanctions and exceptional measures taken by competent authorities in accordance with national provisions transposing this Directive;

• (e) the imposition of a specific own funds requirement under Article 39 of this Directive.

EBA may, in accordance with the second subparagraph of Article 19(1) of Regulation (EU) No 1093/2010 and on its own initiative assist competent authorities in developing consistent cooperation practices.

• (a) changes in the shareholder, organisational or management structure of investment firms in the investment firm group, which require the approval or authorisation of competent authorities;

• (b) significant sanctions imposed on investment firms by competent authorities or any other exceptional measures taken by those authorities; and

• (c) specific own funds requirements imposed in accordance with Article 39.

Article 50

Verification of information concerning entities located in other Member States

• (a) carry out the verification themselves within the framework of their competence;

• (b) allow the competent authorities who made that request to carry out the verification;

• (c) request an auditor or expert to carry out the verification impartially and to report the results promptly.

For the purposes of points (a) and (c), the competent authorities that made the request shall be allowed to participate in the verification.

Section 2 Investment holding companies, mixed financial holding companies and mixed‐activity holding companies

Article 51

Inclusion of holding companies in supervision of compliance with the group capital test

Member States shall ensure that investment holding companies and mixed financial holding companies are included in the supervision of compliance with the group capital test.

Article 52

Qualifications of directors

Member States shall require that the members of the management body of an investment holding company or mixed financial holding company are of sufficiently good repute and possess sufficient knowledge, skills and experience to effectively perform their duties, taking into account the specific role of an investment holding company or mixed financial holding company.

Article 53

Mixed‐activity holding companies

• (a) require that the mixed‐activity holding company supply them with any information that may be relevant for the supervision of that investment firm;

• (b) supervise transactions between the investment firm and the mixed‐activity holding company and the subsidiaries of the latter, and require the investment firm to have in place adequate risk management processes and internal control mechanisms, including sound reporting and accounting procedures to identify, measure, monitor and control those transactions.

Article 54

Sanctions

In accordance with Section 3 of Chapter 1 of this Title, Member States shall ensure that administrative sanctions or other administrative measures aiming to end or mitigate breaches of the laws, regulations or administrative provisions transposing this Chapter or to address the causes of such breaches may be imposed on investment holding companies, mixed financial holding companies and mixed‐activity holding companies, or their effective managers.

Article 55

Assessment of third‐country supervision and other supervisory techniques

Article 56

Cooperation with third‐country supervisory authorities

The Commission may submit recommendations to the Council, either at the request of a Member State or on its own initiative, for the negotiation of agreements with one or more third countries regarding the means of supervising compliance with the group capital test by the following investment firms:

• (a) investment firms the parent undertaking of which has its head office in a third country;

• (b) investment firms located in third countries, the parent undertaking of which has its head office in the Union.

TITLE V PUBLICATION BY COMPETENT AUTHORITIES

Article 57

Publication requirements

• (a) the texts of laws, regulations, administrative rules and general guidance adopted in their Member State pursuant to this Directive;

• (b) the manner of exercise of the options and discretions available pursuant to this Directive and to Regulation (EU) 2019/2033;

• (c) the general criteria and methodologies they use in the supervisory review and evaluation referred to in Article 36 of this Directive;

• (d) aggregate statistical data on key aspects of the implementation of this Directive and of Regulation (EU) 2019/2033 in their Member State, including the number and nature of supervisory measures taken in accordance with point (a) of Article 39(2) of this Directive and of administrative sanctions imposed in accordance with Article 18 of this Directive.

Power 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.

TITLE VI DELEGATED ACTS

Article 58

Exercise of the delegation

TITLE VII AMENDMENTS TO OTHER DIRECTIVES

Article 59

Amendment to Directive 2002/87/EC

In Article 2 of Directive 2002/87/EC, point 7 is replaced by the following:

• ‘(7) “sectoral rules” means Union legal acts relating to the prudential supervision of regulated entities, in particular Regulations (EU) No 575/2013 ([^E0013]) and (EU) 2019/2033 ([^E0014]) of the European Parliament and of the Council and Directives 2009/138/EC, 2013/36/EU ([^E0015]), 2014/65/EU ([^E0016]) and (EU) 2019/2034 ([^E0017]) of the European Parliament and of the Council.

Article 60

Amendment to Directive 2009/65/EC

In point (a) of Article 7(1) of Directive 2009/65/EC, point (iii) is replaced by the following:

• ‘(iii) irrespective of the amount of those requirements, the own funds of the management company must at no time be less than the amount prescribed in Article 13 of Regulation (EU) 2019/2033 of the European Parliament and of the Council ([^E0018]).

Article 61

Amendment to Directive 2011/61/EU

In Article 9 of Directive 2011/61/EU, paragraph 5 is replaced by the following:

‘5. Irrespective of paragraph 3, the own funds of the AIFM shall never be less than the amount required under Article 13 of Regulation (EU) 2019/2033 of the European Parliament and of the Council ([^E0019]).

Article 62

Amendments to Directive 2013/36/EU

Directive 2013/36/EU is amended as follows:

• (1) the title is replaced by the following: ‘Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC’;

• (2) Article 1 is replaced by the following: ‘Article 1 Subject matter This Directive lays down rules concerning:
• (a) access to the activity of credit institutions;
• (b) supervisory powers and tools for the prudential supervision of credit institutions by competent authorities;
• (c) the prudential supervision of credit institutions by competent authorities in a manner that is consistent with the rules set out in Regulation (EU) No 575/2013;
• (d) publication requirements for competent authorities in the field of prudential regulation and supervision of credit institutions.’;

• (3) Article 2 is amended as follows:
• (a) paragraphs 2 and 3 are deleted;
• (b) in paragraph 5, point (1) is deleted;
• (c) paragraph 6 is replaced by the following: ‘6. The entities referred to in points (3) to (24) of paragraph 5 of this Article shall be treated as financial institutions for the purposes of Article 34 and Title VII, Chapter 3.’;

• (4) in Article 3(1), point (4) is deleted;

• (5) Article 5 is replaced by the following: ‘Article 5 Coordination within Member States Member States that have more than one competent authority for the prudential supervision of credit institutions and financial institutions shall take the requisite measures to organise coordination between such authorities.’;

• (6) the following article is inserted: ‘Article 8a Specific requirements for authorisation of credit institutions referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013

(a) the average of monthly total assets, calculated over a period of 12 consecutive months, is equal to or exceeds EUR 30 billion; or (b) the average of monthly total assets calculated over a period of 12 consecutive months is less than EUR 30 billion, and the undertaking is part of a group in which the total value of the consolidated assets of all undertakings in the group that individually have total assets of less than EUR 30 billion and that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 30 billion, both calculated as an average over a period of 12 consecutive months.

(a) the information to be provided by the undertaking to the competent authorities in the application for the authorisation, including the programme of operations provided for in Article 10; (b) the methodology for calculating the thresholds referred to in paragraph 1. Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in points (a) and (b) of the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010. EBA shall submit those draft regulatory technical standards to the Commission by 26 December 2020.’;

• (7) in Article 18, the following point is inserted:
• ‘(aa) uses its authorisation exclusively to engage in the activities referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013 and has, for a period of five consecutive years, average total assets below the thresholds set out in that Article;’;

• (8) Article 20 is amended as follows:
• (a) paragraph 2 is replaced by the following: ‘2. EBA shall publish on its website, and shall update at least annually, a list of the names of all credit institutions that have been granted authorisation.’;
• (b) the following paragraph is inserted: ‘3a. The list referred to in paragraph 2 of this Article shall include the names of undertakings referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013 and shall identify those credit institutions as such. That list shall also outline any changes in comparison with the previous version of the list.’;

• (9) in Article 21b, paragraph 5 is replaced by the following: ‘5. For the purposes of this Article: (a) the total value of assets in the Union of the third‐country group shall be the sum of the following: (i) the total value of assets of each institution in the Union of the third‐country group, as resulting from its consolidated balance sheet or as resulting from their individual balance sheets, where an institution’s balance sheet is not consolidated; and (ii) the total value of assets of each branch of the third‐country group authorised in the Union in accordance with this Directive, Regulation (EU) No 600/2014 of the European Parliament and of the Council ([^E0020]) or Directive 2014/65/EU; (b) the term “institution” shall also include investment firms.

• (10) Title IV is deleted;

• (11) in Article 51(1), the first subparagraph is replaced by the following: ‘1. The competent authorities of a host Member State may request the consolidating supervisor, where Article 112(1) applies, or the competent authorities of the home Member State, that a branch of a credit institution shall be considered to be significant.’;

• (12) in Article 53, paragraph 2 is replaced by the following: ‘2. Paragraph 1 shall not prevent the competent authorities from exchanging information with each other or transmitting information to the ESRB, EBA, or the European Supervisory Authority (European Securities and Markets Authority) (“ESMA”) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council ([^E0021]) in accordance with this Directive, with Regulation (EU) No 575/2013, with Regulation (EU) 2019/2033 of the European Parliament and of the Council ([^E0022]), with Article 15 of Regulation (EU) No 1092/2010, with Articles 31, 35 and 36 of Regulation (EU) No 1093/2010 and with Articles 31 and 36 of Regulation (EU) No 1095/2010, with Directive (EU) 2019/2034 of the European Parliament and of the Council ([^E0023]) and with other directives applicable to credit institutions. That information shall be subject to paragraph 1.

• (13) in Article 66(1), the following point is inserted:
• ‘(aa) carrying out at least one of the activities referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013 and meeting the threshold indicated in that Article without being authorised as a credit institution;’;

• (14) in Article 76(5), the sixth subparagraph is deleted;

• (15) in Article 86, paragraph 11 is replaced by the following: ‘11. Competent authorities shall ensure that institutions have in place liquidity recovery plans setting out adequate strategies and proper implementation measures to address possible liquidity shortfalls, including in relation to branches established in another Member State. Competent authorities shall ensure that those plans are tested by the institutions at least annually, updated on the basis of the outcome of the alternative scenarios set out in paragraph 8, reported to and approved by senior management, so that internal policies and processes can be adjusted accordingly. Institutions shall take the necessary operational steps in advance to ensure that liquidity recovery plans can be implemented immediately. Those operational steps shall include holding collateral immediately available for central bank funding. This includes holding collateral in the currency of another Member State where necessary, or the currency of a third country to which the institution has exposures, and where operationally necessary within the territory of a host Member State or of a third country to whose currency it is exposed.’;

• (16) in Article 110, paragraph 2 is deleted;

• (17) Article 111 is replaced by the following: ‘Article 111 Determination of the consolidating supervisor

Where a parent undertaking is a parent investment firm in a Member State or an EU parent investment firm and none of its subsidiaries is a credit institution, supervision on a consolidated basis shall be exercised by the competent authority that supervises that parent investment firm in the Member State or that EU parent investment firm on an individual basis. Where a parent undertaking is a parent investment firm in a Member State or an EU parent investment firm, and at least one of its subsidiaries is a credit institution, supervision on a consolidated basis shall be exercised by the competent authority of the credit institution, or where there are several credit institutions, the credit institution with the largest balance sheet total.

(a) the competent authority of the credit institution where there is only one credit institution within the group; (b) the competent authority of the credit institution with the largest balance sheet total, where there are several credit institutions within the group; or (c) the competent authority of the investment firm with the largest balance sheet total, where the group does not include any credit institution.

By way of derogation from point (c) of paragraph 3, where a competent authority supervises on an individual basis more than one investment firm within a group, the consolidating supervisor shall be the competent authority that supervises on an individual basis one or more investment firms within the group with the highest balance sheet total in aggregate.