These questions have arisen when performing several supervisory actions regarding the compliance of the financial institutions with the Commission Delegated Regulation (EU) 2019/758, and some guidance at the level of the EU is needed.

Two questions arise as regards the scope and application of the RTS:

1)      Definition of 'subsidiary' for the purposes of the Delegated Regulation

The Delegated Regulation establishes several obligations for financial and credit institutions with respect to the countries in which they have established a branch or they are a majority owner of a subsidiary.

In relation to these subsidiaries, a series of questions arise:

a) Must the subsidiary also be a financial or credit institution?

b) Must the subsidiary be an obliged entity?

c) If the subsidiary is to be considered as an obliged entity: according to the AMLD or according to the regulations of the third country?

2)      Definition of  'financial institution' for the purposes of the Delegated Regulation

There is the case encountered  in practice of a firm that is a subsidiary of a holding company which, in turn, owns several financial subsidiaries.

The firm considers that they are not a group for the purposes of the Delegated Regulation, since their parent company does not fall within the definition of a financial entity set out in Article 3 of Directive (EU) 2015/849 (AMLD).