S.I. No. 710/2020 - European Union (Capital Requirements) (Amendment) Regulations 2020

• “(3A) In carrying out its obligations under paragraph (3), the Bank shall take into account—

  • (a) the buffer guide calculated in accordance with paragraph (2),

  • (b) any current guidance maintained by the ESRB in accordance with Article 135(1)(a), (c) and (d) of the Capital Requirements Directive,

  • (c) any recommendations issued by the ESRB on the setting of a buffer rate, and

  • (d) other variables that the Bank considers relevant for addressing cyclical systemic risk.”,

• (c) in paragraph (4)(b), by the substitution of “paragraphs (3) and (3A)” for “paragraph (3)”, and

• (d) by the substitution of the following paragraph for paragraph (7):

• “(7) The Bank shall—

  • (a) publish quarterly on its website at least the following information:

    • (i) the applicable countercyclical buffer rate;

    • (ii) the relevant credit-to-GDP-ratio and its deviation from the long term trend;

    • (iii) the buffer guide calculated in accordance with paragraph (2);

    • (iv) a justification for that buffer rate;

    • (v) where the buffer rate is increased, the date from which the institutions shall apply that increased buffer rate for the purpose of calculating their institution-specific countercyclical capital buffer;

    • (vi) where the date referred to in clause (v) is less than 12 months after the date of the publication under this paragraph, a reference to the exceptional circumstances that justify that shorter deadline for application;

    • (vii) where the buffer rate is decreased, the indicative period during which no increase in the buffer rate is expected, together with a justification for that period,

  • (b) take all reasonable steps to coordinate the timing of that publication with designated authorities in other Member States, and

  • (c) notify each change of the countercyclical buffer rate and the information specified in subparagraphs (a)(i) to (vii) to the ESRB.”.

Amendment of Regulation 129 of Principal Regulations

52.

• (a) in paragraph (3), in subparagraph (b), by the substitution of “requirement” for “requirements”,

• (b) in paragraph (4), by the substitution of “Where” for “While”,

• (c) by the substitution of the following paragraph for paragraph (6):

• “(6) The sum to be multiplied in accordance with paragraph (5) shall be—

  • (a) the interim profits not included in Common Equity Tier 1 capital pursuant to Article 26(2) of the Capital Requirements Regulation net of any distribution of profits or any payment resulting from the actions referred to in subparagraphs (a), (b) and (c) of paragraph (3), plus

  • (b) the year-end profits not included in Common Equity Tier 1 capital pursuant to Article 26(2) of the Capital Requirements Regulation net of any distribution of profits or any payment resulting from the actions referred to in subparagraphs (a), (b) and (c) of paragraph (3), minus

  • (c) the amounts which would be payable by tax if the items specified in paragraphs (a) and (b) were to be retained.”, and

• (d) by the substitution of the following paragraph for paragraph (7):

• “(7) The factor, referred to in paragraph (5), shall be determined as follows:

  • (a) where the Common Equity Tier 1 capital maintained by the institution which is not used to meet any of the own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage set out in Regulation 92(2)(a), expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) of that Regulation, is within the first (that is, the lowest) quartile of the combined buffer requirement, the factor shall be zero;

  • (b) where the Common Equity Tier 1 capital maintained by the institution which is not used to meet any of the own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage set out in Regulation 92(2)(a), expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) of that Regulation, is within the second quartile of the combined buffer requirement, the factor shall be 0.2;

  • (c) where the Common Equity Tier 1 capital maintained by the institution which is not used to meet the own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage set out in Regulation 92(2)(a), expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) of that Regulation, is within the third quartile of the combined buffer requirement, the factor shall be 0.4;

  • (d) where the Common Equity Tier 1 capital maintained by the institution which is not used to meet the own funds requirements set out in points (a), (b) and (c) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage set out in Regulation 92(2)(a), expressed as a percentage of the total risk exposure amount calculated in accordance with Article 92(3) of that Regulation, is within the fourth (that is, the highest) quartile of the combined buffer requirement, the factor shall be 0.6;

  • (e) The lower and upper bounds of each quartile of the combined buffer requirement shall be calculated as follows:

  where:

  Qn = the ordinal number of the quartile concerned.”.

Failure to meet buffer requirements

53.

“Failure to meet combined buffer requirement

129A. An institution shall be considered as failing to meet the combined buffer requirement for the purposes of Regulation 129 where it does not have own funds in an amount and of the quality needed to meet, at the same time, that combined buffer requirement and each of the following:

• (a) the requirement under point (a) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage under Regulation 92(2)(a);

• (b) the requirement under point (b) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage under Regulation 92(2)(a);

• (c) the requirement under point (c) of Article 92(1) of the Capital Requirements Regulation and the additional own funds requirement addressing risks other than the risk of excessive leverage under Regulation 92(2)(a).

Restriction on distributions in case of failure to meet leverage ratio buffer requirement

129B. (1) An institution that meets the leverage ratio buffer requirement pursuant to Article 92(1a) of the Capital Requirements Regulation shall not make a distribution in connection with Tier 1 capital to an extent that would decrease its Tier 1 capital to a level where the leverage ratio buffer requirement is no longer met.

• (2) An institution that fails to meet the leverage ratio buffer requirement shall calculate the leverage ratio related maximum distributable amount (in this Regulation referred to as the ‘L-MDA’) in accordance with paragraph (5) and shall notify the Bank thereof.

• (3) Where the paragraph (2) applies, the institution shall not undertake any of the following actions before it has calculated the L-MDA:

  • (a) make a distribution in connection with Common Equity Tier 1 capital;

  • (b) create an obligation to pay variable remuneration or discretionary pension benefits or pay variable remuneration if the obligation to pay was created at a time when the institution failed to meet the leverage ratio buffer requirement;

  • (c) make payments on Additional Tier 1 instruments.

• (4) Where an institution fails to meet or exceed its leverage ratio buffer requirement, it shall not distribute more than the L-MDA calculated in accordance with paragraph (5) through any action referred to in paragraph (3).

• (5) Institutions shall calculate the L-MDA by multiplying the sum calculated in accordance with paragraph (7) by the factor determined in accordance with paragraph (8).

• (6) The L-MDA shall be reduced by the amount, if any, resulting from the actions referred to in paragraph (3).

• (7) The sum to be multiplied in accordance with paragraph (5) shall consist of—

  • (a) any interim profits not included in Common Equity Tier 1 capital pursuant to Article 26(2) of the Capital Requirements Regulation net of any distribution of profits or any payment related to the actions referred to in paragraph (3), plus

  • (b) any year-end profits not included in Common Equity Tier 1 capital pursuant to Article 26(2) of the Capital Requirements Regulation net of any distribution of profits or any payment related to the actions referred to in paragraph (3), minus

  • (c) amounts which would be payable by tax if the items specified in subparagraphs (a) and (b) were to be retained.

• (8) The factor referred to in paragraph (5) shall be determined as follows:

  • (a) where the Tier 1 capital maintained by the institution which is not used to meet the requirements under point (d) of Article 92(1) of the Capital Requirements Regulation and under Regulation 92(2)(a) when addressing the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, expressed as a percentage of the total exposure measure calculated in accordance with Article 429(4) of the Capital Requirements Regulation, is within the first (that is, the lowest) quartile of the leverage ratio buffer requirement, the factor shall be zero;

  • (b) where the Tier 1 capital maintained by the institution which is not used to meet the requirements under point (d) of Article 92(1) of the Capital Requirements Regulation and under Regulation 92(2)(a)when addressing the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, expressed as a percentage of the total exposure measure calculated in accordance with Article 429(4) of the Capital Requirements Regulation, is within the second quartile of the leverage ratio buffer requirement, the factor shall be 0.2;

  • (c) where the Tier 1 capital maintained by the institution which is not used to meet the requirements under point (d) of Article 92(1) of the Capital Requirements Regulation and under Regulation 92(2)(a) when addressing the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, expressed as a percentage of the total exposure measure calculated in accordance with Article 429(4) of the Capital Requirements Regulation, is within the third quartile of the leverage ratio buffer requirement, the factor shall be 0.4;

  • (d) where the Tier 1 capital maintained by the institution which is not used to meet the requirements under point (d) of Article 92(1) of the Capital Requirements Regulation and under Regulation 92(2)(a) when addressing the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation, expressed as a percentage of the total exposure measure calculated in accordance with Article 429(4) of the Capital Requirements Regulation, is within the fourth (that is, the highest) quartile of the leverage ratio buffer requirement, the factor shall be 0.6;

  • (e) The lower and upper bounds of each quartile of the leverage ratio buffer requirement shall be calculated as follows:

  where:

  Qn = the ordinal number of the quartile concerned.

• (9) The restrictions imposed by this Regulation shall only apply to payments that result in a reduction of Tier 1 capital or in a reduction of profits, and where a suspension of payment or failure to pay does not constitute an event of default or a condition for the commencement of proceedings under the insolvency regime applicable to the institution.

• (10) Where an institution fails to meet the leverage ratio buffer requirement and intends to distribute any of its distributable profits or undertake an action referred to in paragraph (3), it shall notify the Bank and provide the information listed in Regulation 129(9), with the exception of subparagraph (a)(iii) thereof, and the L-MDA calculated in accordance with paragraph (5).

• (11) Institutions shall maintain arrangements to ensure that the amount of distributable profits and the L-MDA are calculated accurately, and shall be able to demonstrate that accuracy to the Bank on request.

• (12) For the purposes of paragraphs (1), (2) and (3), a distribution in connection with Tier 1 capital shall include any of the items listed in Regulation 129(11).

Failure to meet leverage ratio buffer requirement

129C. An institution shall be considered as failing to meet the leverage ratio buffer requirement for the purposes of Regulation 129B where it does not have Tier 1 capital in the amount needed to meet, at the same time, the requirement under Article 92(1a) of the Capital Requirements Regulation and the requirement under point (d) of Article 92(1) of that Regulation and in Regulation 92(2)(a) when addressing the risk of excessive leverage not sufficiently covered by point (d) of Article 92(1) of the Capital Requirements Regulation.”.

Amendment of Regulation 130 of Principal Regulations

54.

• “(a) Where an institution fails to meet its combined buffer requirement or, where applicable, its leverage ratio buffer requirement, it shall prepare a capital conservation plan and submit it to the Bank no later than 5 working days after it identified that it was failing to meet that requirement, unless the Bank authorises a longer period, which shall not exceed 10 days.”.

Amendment of Regulation 131 of Principal Regulations

55.

• “(c) the general criteria and methodologies it uses in the review and evaluation referred to in Regulation 85, including the criteria for applying the principle of proportionality as referred to in Regulation 85(5A);”.

Transitional provisions on approval of financial holding companies and mixed financial holding companies

56.

“Transitional provisions on approval of financial holding companies and mixed financial holding companies

142A. (1) Parent financial holding companies and parent mixed financial holding companies already existing on 27 June 2019 shall apply for approval in accordance with Chapter 1A of Part 3 by 28 June 2021.

• (2) Where a financial holding company or mixed financial holding company already existing on 27 June 2019 fails to apply for approval by 28 June 2021, appropriate measures shall be taken pursuant to Regulation 9F.

• (3) During the period up to and including 28 June 2021, the Bank may exercise its powers under—

  • (a) Regulation 9F,

  • (b) Regulation 90,

  • (c) Regulation 92,

  • (d) Regulation 93, and

  • (e) section 45(1) of the Act of 2013,

  in respect of financial holding companies and mixed financial holding companies subject to approval in accordance with Chapter 1A of Part 3 for the purposes of consolidated supervision.”.

Amendment of Central Bank Act 1942

57.

• (a) in section 33AK—

• (i) in subsection (5)—

• (I) in paragraph (ba), by the substitution of “1988 to 2018, or” for “1988 to 2018.”, and

• (II) by the insertion of the following paragraph after paragraph (ba):

• “(bb) to financial intelligence units (within the meaning of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015²⁰ on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, as amended by Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018²¹ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU).”, and

• (ii) in subsection (10), by the substitution of the following paragraph for paragraph (r) of the definition of “supervisory EU legal acts”:

• “(r) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013²² on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

  • (i) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014²³ on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

  • (ii) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014²⁴ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

  • (iii) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015²⁵ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

  • (iv) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018²⁶ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

  • (v) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019² amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”, and

• (b) in section 33ANC, in subsection (1)(a)—

• (i) in subparagraph (iii), by the substitution of “a provision of those Regulations,” for “a provision of those Regulations, or”,

• (ii) in subparagraph (iv), by the substitution of “under this Part, or” for “under this Part,”, and

• (iii) by the insertion of the following subparagraph after subparagraph (iv):

• “(v) any obligation imposed on a financial holding company or a mixed financial holding company by Part IV of the Central Bank Act 1997 or Part 2, 3 or 7 of the Central Bank (Supervision and Enforcement) Act 2013 ,”.

Amendment of Central Bank Act 1971

58.

• (a) in section 2—

• (i) in subsection (1), by the substitution of the following definition for the definition of “Capital Requirements Directive”:

“ ‘Capital Requirements Directive’ means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013²⁷ on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

• (a) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014²⁸ on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

• (b) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014²⁹ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

• (c) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015³⁰ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

• (d) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018³¹ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

• (e) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019² amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”, and

• (ii) by the substitution of the following section for subsection (1A):

• “(1A) In this Act, ‘competent authority’, ‘financial holding company’, ‘group’, ‘insurance undertaking’, ‘investment firm’, ‘management body’, ‘mixed financial holding company’, ‘own funds’, ‘parent undertaking’, and ‘qualifying holding’ each has the meaning assigned to it by Regulation 3 of the European Union (Capital Requirements) Regulations 2014.”,

• (b) in section 7—

• (i) in subsection (4)—

• (I) in paragraph (d), by the substitution of “credit union.” for “credit union, or”, and

• (II) by the deletion of paragraphs (e) and (f), and

• (ii) by the insertion of the following subsection after subsection (4):

• “(4A) Subsection (1) shall not apply where—

  • (a) the person accepting deposits or other repayable funds from the public is not a credit institution,

  • (b) the person is—

    • (i) a manager, trustee or custodian of a unit trust or a collective investment undertaking or an entity that provides services to such an undertaking,

    • (ii) another member state of the European Union, a regional or local authority of such a state, or a public international organisation of which one or more member states of the European Union are members, or

    • (iii) a case covered expressly by European Union law, and

  • (c) the acceptance of deposits or other repayable funds from the public by the person is subject to regulation and controls intended to protect depositors and investors.”,

• (c) in section 9A—

• (i) in subsection (1), by the substitution of “In this section and sections 9B, 9C and 9CA” for “In this section and sections 9B and 9C”, and

• (ii) by the substitution of the following subsection for subsection (5):

• “(5) The Bank shall notify the European Banking Authority of the following:

  • (a) the authorisations granted under subsection (2) for branches and any subsequent changes to such authorisations;

  • (b) the total assets and liabilities of the branches in respect of which an authorisation has been granted under subsection (2), as periodically reported;

  • (c) the name of the third-country group to which a branch, in respect of which an authorisation has been granted, belongs.”,

• (d) by the insertion of the following sections after section 9C:

“Third country branch reporting

9CA. (1) Subject to subsection (2), a branch shall report the following information to the Bank on an annual basis:

• (a) the total assets corresponding to the activities of the branch;

• (b) information on the liquid assets available to the branch, including the availability of liquid assets in EEA state currencies;

• (c) the own funds that are at the disposal of the branch;

• (d) the deposit protection arrangements available to depositors in the branch;

• (e) the risk management arrangements;

• (f) the governance arrangements, including key function holders for the activities of the branch;

• (g) the recovery plans covering the branch;

• (h) any other information considered by the Bank to be necessary to enable comprehensive monitoring of the activities of the branch.

• (2) The Bank may direct a branch to report the information required under subsection (2) more frequently than is provided for in that subsection where such a direction is necessary to ensure effective supervision of the branch.

Cooperation with competent authorities

9CB. Where—

- (*a*) a branch of a credit institution which is part of a third-country group and has its head office in a third country is supervised by a competent authority in an EEA member state (in this section referred to as ‘a third-country group branch competent authority’),

- (*b*) an institution in the third-country group is supervised by a competent authority in another EEA member state (in this section referred to as ‘a third-country group credit institution competent authority’), and

- (*c*) the Bank is either a third country group branch competent authority or a third-country group credit institution competent authority,

  the Bank shall cooperate closely with all third country branch competent authorities and third-country group credit institution competent authorities—

    - (i) to ensure that all activities of that third-country group in the European Union are subject to comprehensive supervision,

    - (ii) to prevent the requirements applicable to third-country groups pursuant to the Capital Requirements Directive and the Capital Requirements Regulation from being circumvented, and

    - (iii) to prevent any detrimental impact on the financial stability of the European Union.”,

• (e) by the substitution of the following section for section 9D:

“9D. (1) An application for a licence shall be accompanied by—

• (a) a programme of operations, and

• (b) a description of the arrangements, processes and mechanisms referred to in Regulation 61(1) of the European Union (Capital Requirements) Regulations 2014 proposed to be implemented.

• (2) A programme of operations referred to in subsection (1)(a) shall—

  • (a) set out the types of business envisaged by the applicant,

  • (b) set out the structural organisation of the credit institution in respect of which the application is being made, and

  • (c) where the credit institution is part of a group, specify—

    • (i) the parent undertakings,

    • (ii) the financial holding companies, if any, and

    • (iii) the mixed financial holding companies, if any,

    within the group.

• (3) The Bank shall not take a draft decision to propose to the ECB to grant a licence unless it is satisfied that the arrangements, processes and mechanisms referred to in Regulation 61 of the European Union (Capital Requirements) Regulations 2014 proposed to be implemented would, if implemented, enable sound and effective risk management by that institution.”,

• (f) in section 9G, by the substitution of the following subsection for subsection (4):

• “(4) The Bank shall not take a draft decision to propose to the ECB to grant a licence if, taking into account the need to ensure the sound and prudent management of a credit institution, it is not satisfied, having regard to the criteria specified in section 9GA(1), as to the suitability of the shareholders or members.”,

• (g) by the insertion of the following section after section 9G:

“Assessment of suitability of shareholders or members

9GA. (1) The criteria referred to in section 9G(4) are as follows:

• (a) the reputation of the shareholders or members of the credit institution;

• (b) the reputation, knowledge, skills and experience, as specified in Regulation 79 of the European Union (Capital Requirements) Regulations 2014, of any member of the management body who will direct the business of the shareholders or members of the credit institution;

• (c) the financial soundness of the credit institution, in particular in relation to the type of business pursued and envisaged in the credit institution;

• (d) whether the credit institution will be able to comply and continue to comply with the prudential requirements of the European Union (Capital Requirements) Regulations 2014 and the Capital Requirements Regulation, and where applicable, other European Union law, in particular Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002³² and Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009³³ , including, where applicable, whether the group of which it is a part has a structure that makes it possible to exercise effective supervision, effectively exchange information among the competent authorities of relevant Member States and determine the allocation of responsibilities among the competent authorities of relevant Member States;

• (e) whether there are reasonable grounds to suspect that, in connection with the proposed authorisation, money laundering or terrorist financing within the meaning of Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005³⁴ on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing is being or has been committed or attempted, or that the proposed authorisation could increase the risk thereof.

• (2) In carrying out its assessment of the suitability of the shareholders or members, the Bank shall consult with the competent authorities of other relevant Member States if one or more of the shareholders or members is—

  • (a) a credit institution, insurance undertaking, reinsurance undertaking, investment firm, or a management company within the meaning of Article 2(1)(b) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009³⁵ (in this subsection referred to as a ‘UCITS management company’) authorised in another Member State,

  • (b) the parent undertaking of a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State, or

  • (c) a natural or legal person controlling a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State.

• (3) The Bank shall, without undue delay, provide competent authorities in other Member States with any information that is essential or relevant for the assessment of the shareholders or members.

• (4) The Bank shall, for the purposes of subsection (3), communicate all relevant information upon request and all essential information on its own initiative.

• (5) A draft decision taken by the Bank to propose to the ECB to grant a licence shall indicate any views or reservations expressed by the competent authorities responsible for the shareholder or member concerned.

• (6) In this section, ‘reinsurance undertaking’ has the meaning assigned to it in point (6) of Article 4(1) of the Capital Requirements Regulation.”,

• (h) in section 9I, by the insertion of the following subsections after subsection (4):

• “(5) The Bank may reject an application only if—

  • (a) there are reasonable grounds for doing so on the basis of the criteria specified in section 9GA(1), or

  • (b) the information provided by the applicant is incomplete.

• (6) The Bank shall not assess an application in terms of the economic needs of the market.”, and

• (i) in section 11(1)(b)(x), by the substitution of the following clause for clause (I):

• “(I) set out in Part Three (other than Articles 92a and 92b), Four or Six of the Capital Requirements Regulation, or”.

Amendment of Building Societies Act 1989

59.

• (a) in section 2(1A), by the substitution of “ ‘qualifying holding’ and ‘Capital Requirements Regulation’ ” for “and ‘qualifying holding’ ”,

• (b) by the substitution of the following section for section 17A:

“17A. (1) An application for an authorisation shall be accompanied by—

• (a) a programme of operations, and

• (b) a description of the arrangements, processes and mechanisms referred to in Regulation 61(1) of the European Union (Capital Requirements) Regulations 2014 proposed to be implemented.

• (2) A programme of operations referred to in subsection (1)(a) shall—

  • (a) set out the types of business envisaged by the applicant,

  • (b) set out the structural organisation of the society in respect of which the application is being made, and

  • (c) where the society is part of a group, specify—

    • (i) the parent undertakings,

    • (ii) the financial holding companies, if any, and

    • (iii) the mixed financial holding companies, if any,

    within the group.

• (3) The Bank shall not take a draft decision to propose to the ECB to grant an authorisation unless it is satisfied that the arrangements, processes and mechanisms referred to in Regulation 61(1) of the European Union (Capital Requirements) Regulations 2014 proposed to be implemented would, if implemented, enable sound and effective risk management by that society.”.

• (c) in section 17D, by the substitution of the following subsection for subsection (4):

• “(4) The Bank shall not take a draft decision to propose to the ECB to grant an authorisation if, taking into account the need to ensure the sound and prudent management of a society, it is not satisfied, having regard to the criteria specified in section 17DA(1), as to the suitability of the shareholders or members.”,

• (d) by the insertion of the following sections after section 17D:

“Assessment of suitability of shareholders or members

17DA. (1) The criteria referred to in section 17D(4) are as follows:

• (a) the reputation of the shareholders or members of the society;

• (b) the reputation, knowledge, skills and experience, as specified in Regulation 79 of the European Union (Capital Requirements) Regulations 2014, of any member of the management body who will direct the business of the shareholders or members of the society;

• (c) the financial soundness of the society, in particular in relation to the type of business pursued and envisaged in the society;

• (d) whether the society will be able to comply and continue to comply with the prudential requirements of the European Union (Capital Requirements) Regulations 2014 and the Capital Requirements Regulation, and where applicable, other European Union law, in particular Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002³⁶ and Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009³⁷ , including, where applicable, whether the group of which it is a part has a structure that makes it possible to exercise effective supervision, effectively exchange information among the competent authorities of relevant Member States and determine the allocation of responsibilities among the competent authorities of relevant Member States;

• (e) whether there are reasonable grounds to suspect that, in connection with the proposed authorisation, money laundering or terrorist financing within the meaning of Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005³⁸ on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing is being or has been committed or attempted, or that the proposed authorisation could increase the risk thereof.

• (2) In carrying out its assessment of the suitability of the shareholders or members, the Bank shall consult with the competent authorities of other relevant Member States if one or more of the shareholders or members is—

  • (a) a credit institution, insurance undertaking, reinsurance undertaking, investment firm, or a management company within the meaning of Article 2(1)(b) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009³⁹ (in this subsection referred to as a ‘UCITS management company’) authorised in another Member State,

  • (b) the parent undertaking of a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State, or

  • (c) a natural or legal person controlling a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State.

• (3) The Bank shall, without undue delay, provide competent authorities in other Member States with any information that is essential or relevant for the assessment of the shareholders or members.

• (4) The Bank shall, for the purposes of subsection (3), communicate all relevant information upon request and all essential information on its own initiative.

• (5) A draft decision taken by the Bank to propose to the ECB to grant an authorisation shall indicate any views or reservations expressed by the competent authorities responsible for the shareholder or member concerned.

• (6) In this section, ‘reinsurance undertaking’ has the meaning assigned to it in point (6) of Article 4(1) of the Capital Requirements Regulation.

Waiver for credit institutions permanently affiliated to central body

17DB. (1) The Bank may waive the requirements set out in sections 17A, 17B and 17C(b) and (c) with regard to a credit institution referred to in Article 10 of the Capital Requirements Regulation in accordance with the conditions set out therein.

• (2) Where the Bank exercises a waiver referred to in paragraph (1)—

  • (a) Regulation 7,

  • (b) Regulations 32 and 33,

  • (c) Regulation 35(1) to (3),

  • (d) Regulations 38 to 44,

  • (e) Regulations 61 to 84, and

  • (f) Regulations 115 to 130,

  of the European Union (Capital Requirements) Regulations 2014 ( S.I. No. 158 of 2014 ) shall apply to the whole as constituted by the central body together with its affiliated institutions.”, and

• (e) in section 40(2)(n), by the substitution of “prudential requirements set out in Part Three (other than Articles 92a and 92b), Four or Six” for “prudential requirements set out in Parts Three, Four or Six”.

Amendment of Central Bank Act 1997

60.

• (a) by the insertion of the following definitions:

“ ‘financial holding company’ has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014 ( S.I. No. 158 of 2014 );

‘mixed financial holding company’ has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014;”, and

• (b) by the insertion of the following subsection after subsection (3):

• “(4) In this Part—

  • (a) a reference to a financial service provider shall include a reference to a financial holding company or a mixed financial holding company,

  • (b) a reference to a regulated financial service provider shall include a reference to a financial holding company or a mixed financial holding company, and

  • (c) a reference to a person concerned in the management of a financial service provider shall include a reference to a person concerned in the management of a financial holding company or a mixed financial holding company.”.

Amendment of Central Bank (Supervision and Enforcement) Act 2013

61.

• (a) in section 3, by the insertion of the following definitions:

“ ‘financial holding company’ has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014 ( S.I. No. 158 of 2014 );

‘mixed financial holding company’ has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014;”,

• (b) by the substitution of the following section for section 7:

“Interpretation (Part 2)

1. (1) In this Part—

‘reviewee’ shall be read in accordance with section 8;

‘reviewer’ shall be read in accordance with section 11.

• (2) In this Part—

  • (a) a reference to a financial service provider shall include a reference to a financial holding company or a mixed financial holding company, and

  • (b) a reference to a regulated financial service provider shall include a reference to a financial holding company or a mixed financial holding company.”,

• (c) in section 21, in subsection (1)—

• (i) in paragraph (j), by the substitution of “Regulations;” for “Regulations.”, and

• (ii) by the insertion of the following paragraphs after paragraph (j):

• “(k) a financial holding company;

• (l) a mixed financial holding company.”,

• (d) in section 22(1), in paragraph (a), by the substitution of “financial service providers, financial holding companies or mixed financial holding companies, or” for “financial service providers, or”,

• (e) in section 24(1), by the substitution of “effective regulation of financial service providers, financial holding companies or mixed financial holding companies,” for “effective regulation of financial service providers,”,

• (f) in section 29(1), by the substitution of “the business of a regulated financial service provider, a financial holding company or a mixed financial holding company” for “the business of a regulated financial service provider”, and

• (g) in Part 7, by the insertion of the following section after section 47:

“Financial holding companies and mixed financial holding companies

47A. In this Part—

• (a) a reference to a financial service provider shall include a reference to a financial holding company or a mixed financial holding company, and

• (b) a reference to a regulated financial service provider shall include a reference to a financial holding company or a mixed financial holding company.”.

Amendment of European Communities (Financial Conglomerates) Regulations 2004

62.

“ ‘Capital Requirements Directive’ means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013⁴⁰ on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

• (a) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014⁴¹ on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

• (b) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014⁴² establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

• (c) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015⁴³ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

• (d) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018⁴⁴ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

• (e) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019² amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”.

Amendment of European Union (Bank Recovery and Resolution) Regulations 2015

63.

“ ‘Capital Requirements Directive’ means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013⁴⁵ on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

• (a) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014⁴⁶ on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

• (b) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014⁴⁷ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

• (c) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015⁴⁸ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

• (d) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018⁴⁹ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

• (e) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019⁵⁰ amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”.

Amendment of European Union (Credit Institutions: Financial Statements) Regulations 2015

64.

“ ‘Capital Requirements Directive’ means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013⁵¹ on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

• (a) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014⁵² on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

• (b) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014⁵³ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

• (c) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015⁵⁴ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

• (d) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018⁵⁵ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

• (e) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019⁵⁶ amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”.

Amendment of European Union (Payment Services) Regulations 2018

65.

“ ‘Directive 2013/36/EU’ means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013⁵⁷ on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC as amended by—

• (a) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014⁵⁸ on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010,

• (b) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014⁵⁹ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council,

• (c) Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015⁶⁰ on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC,

• (d) Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018⁶¹ amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, and

• (e) Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019⁶² amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures;”.

GIVEN under my Official Seal,

22 December, 2020.

PASCHAL DONOHOE,

Minister for Finance.

Footnotes