On 24 April 2019, the European Banking Authority (EBA) published an opinion on the nature of passport notifications of payment institutions (PIs) and electronic money institutions (EMIs) using agents and distributors located in another EU Member State, under PSD2, the second Electronic Money Directive (2EMD) and the Fourth Anti-money Laundering Directive (MLD4).

An EBA analysis of approaches by National Competent Authorities (NCAs) across Member States to handling passport notifications of PIs or EMIs revealed significant differences in the treatment of activities carried out by PIs and EMIs through agents or distributors in another Member State. As such, the EBA has issued the opinion in order to provide clarity regarding the criteria that NCAs should take into account when assessing whether or not an activity carried out by a PI or EMI using agents or distributors in a host Member State amounts to an establishment of that PI / EMI in the host Member State.

The opinion’s guidance is divided into the following sections:

• the general criteria under EU law for interpreting the concept of ‘establishment’;
• the application of the concept of ‘establishment’ to agents and distributers;
• the implications of the existence of an ‘establishment’ under the sectorial legislation and MLD4.

The opinion is addressed to NCAs. However, given the supervisory expectations it conveys, it may also be useful for PIs and EMIs providing services on a cross-border basis within the EU to consider.