The European Banking Authority (EBA) has published a letter from its chairperson, Andrea Enria, to Oliver Guersent, European Commission Director-General, DG FISMA, on the regulatory perimeter under the CRD IV / CRR.

The letter is in response to Mr Guersent’s letter of 22 January 2018 regarding the EBA’s opinion and report on other financial intermediaries and regulatory perimeter issues.

In his letter Mr Enria sets out some further reflections in relation to the amendments to Article 2(5) CRD IV which excludes from the scope of the Directive entities pursuing public policy objectives, such as central banks and post office giro institutions, and other entities where, due to the nature of their activities, it is not considered necessary to subject them to EU legislation intended to promote a level playing field for the provision of banking services.

The letter also refers to the Commission’s proposals for new Articles 2(5a) and 2(5b), which would confer on the Commission powers to make delegated acts for the purposes of removing specific institutions or categories of institution from the scope of the Directive. The letter mentions that the EBA refrained from commenting on these proposals as the decision to use delegated acts was a political matter.

The letter also discusses Article 9(2) CRD IV which enables Member States to exclude from the prohibition in Article 9(1) certain entities, including those ‘expressly covered by national law… provided that [the] activities are subject to regulations and controls intended to protect depositors and investors’. In particular, the letter refers to the EBA’s opinion and report noting that it appears that Member States are relying on this Article to exclude various types of entities and variations are arising in part from the absence of a common definition of the terms ‘deposit’, ‘other repayable funds’ and ‘public’ used in the prohibition specified in Article 9(1) CRD IV and the definition of ‘credit institution’ set out in point (1) of Article 4(1) CRR.

In relation to the interaction between Article 2(5) and 9(2) CRD IV, Mr Enria’s letter states that these provisions can be regarded as complementary in providing mechanisms to frame the application of the Directive. However, the Commission’s proposals to insert new Articles 2(5a) and 2(5b) would not be sufficient to take account of the entities for which reliance is currently placed under Article 9(2).

Mr Enria states that the EBA sees merits in the inclusion in the Directive of a specific monitoring role for the EBA taking account of approaches to the definition of the terms ‘deposit’, ‘other repayable funds’ and ‘public’, and in imposing an obligation for Member States to report to the EBA where the discretion conferred by Article 9(2) CRD IV has been relied upon to exclude entities from the scope of the Directive.

View EBA letter regarding its opinion and report on matters relating to the regulatory perimeter under the CRD IV / CRR, 9 February 2018