On 23 May 2023, the European Central Bank (ECB) published a guide on qualifying holding procedures.
Article 4(1)(c) of the Regulation establishing the Single Supervisory Mechanism (SSM Regulation) gives the ECB exclusive competence to assess acquisitions and increases of qualifying holdings in credit institutions in the countries participating in the SSM. Article 6(4) of the SSM Regulation provides that this competence is applicable to both significant institutions and less significant institutions. In addition, since 1 October 2020, the ECB also assesses acquisitions and increases of qualifying holdings in credit institutions in Bulgaria due to Bulgaria entering into close cooperation with the ECB under Article 7 of the SSM Regulation. The competence is exercised in close alignment with Member State competent authorities. The assessment is carried out in line with Article 23 of the Capital Requirements Directive.
Whilst not legally binding, the guide now published by the ECB is a practical tool which seeks to clarify the supervisory approach taken by Member State competent authorities and the ECB in the assessment of qualifying holding procedures. The guide covers:
- The scope of the persons required to undergo an assessment.
- How the assessment criteria are applied.
- Further guidance on some of the key documentation required in the assessment of qualifying holding procedures.
The guide also provides more information on complex acquisition structures, the application of proportionality and specific procedural aspects.
The ECB has also published a feedback statement providing an overview of comments received during the public consultation, and the ECB’s assessment of these comments.
The guide also complements the ECB’s guide on the supervisory approach to consolidation in the banking sector, which provides guidance on the overall approach, supervisory expectations and key prudential aspects arising within consolidation projects and ongoing supervision of newly combined entities resulting from such transactions.
