The Committee of European Banking Supervisors (CEBS) has today published its guidelines on revised Article 3 of Directive 2006/48/EC (hereinafter "Article 3").
Currently, Article 3 allows Member States to provide for special prudential regimes for credit institutions which have been permanently affiliated to a central body since 15 December 1977, provided that those regimes were introduced into national law by 15 December 1979. Those time limits prevent Member States, especially those which have acceded to the European Union since 1980, from introducing or maintaining such special prudential regimes for similarly affiliated credit institutions which were set up on their territories.
In order to ensure equal conditions for competition between credit institutions in Member States, Article 3 has been revised and the time limits removed. This means that from 31 December 2010 – the application date of the revised article - all Member States could provide for the special prudential regime, set out in Article 3, for all existing or future affiliated credit institutions that meet the conditions defined in that Article.
The guidelines take account of the feedback received following CEBS's publication for consultation of its draft proposals (CP41) on the application of Article 3, as well as of the technical input and comments provided by industry experts appointed by the European Association of Co-operative Banks (EACB).
The main aim of the CEBS's guidelines is to enhance the convergence of the supervisory practices on the application of Article 3 across Member States. To achieve this objective, the guidelines provide clarity on the interpretation and guidance on the application of several aspects of Article 3.
The guidelines clarify CEBS's understanding of the main purpose of Article 3, which is to ensure that Groups, as defined in the Article, are accorded equal treatment vis-à-vis credit institutions with a significant number of branches.
CEBS acknowledges that there may be institutions affiliated to Groups which do not fulfil the requirements of Article 3, or which fulfil those requirements but do not apply for derogations of Article 3 and, therefore, meet all requirements of Directive 2006/48/EC and are supervised on a solo basis. Nevertheless, the decision on the application of Article 3 is incumbent on each Member State's competent authority.
Member States that wish to allow the use of the special prudential regime set out in the revised Article 3 have to transpose it into their national law. Member States wishing to make use of the amended Article 3 have to transpose CEBS's guidelines into their national legal/policy framework and apply them, at the very latest, six months after their publication date. If Members decide to make use of the amended Article 3 after 31 December 2010, CEBS expects the application of its guidelines at the very latest at the same time as the revised Article 3 is implemented in their national legislation.