European Communities (Credit Institutions) (Consolidated Supervision) Regulations 2009
Statutory Instruments
Source: Statutory Instruments

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paragraphs: These Regulations may be cited as the European Communities (Credit Institutions) (Consolidated Supervision) Regulations 2009.
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paragraphs: These Regulations come into operation on the day after the date on which their publication is notified in Iris OifigiÃºil.
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paragraphs: (1) In these Regulations:
(a) a company in respect of which the institution holds—
(i) not less than 20 per cent of the nominal value of the company’s equity share capital, or
(ii) not less than 20 per cent of the voting shares of the company, or
(b) a subsidiary company of the institution, or
(c) a holding company of the institution, or
(d) if the institution is a subsidiary company of another company—
(i) the other company, or
(ii) any other subsidiary of the other company, or
(e) an associated company (within the meaning given by the Central Bank Act 1971 (No. 24 of 1971)) of the institution, or
(f) a partnership in which the institution has an interest, and whose business is, in the opinion of the Bank, materially relevant to the supervision of the institution;
(2) An expression defined in the Recast Credit Institutions Directive and used in these Regulations without definition has in these Regulations the meaning given by that Directive.
(3) A credit institution or financial holding company is taken to be established in a Member State if its head office is established in that State.
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paragraphs: (1) If—
(a) two or more credit institutions have as their parent the same parent financial holding company, and that financial holding company is established in the State or is an EU parent financial holding company,
(b) one or more of those credit institutions is authorised by the Bank, and
(c) one or more of those credit institutions is authorised by the competent authority of another Member State,
(2) If—
(a) the parents of credit institutions authorised in two or more Member States comprise two or more financial holding companies that have their head offices in different Member States, and
(b) at least one of those credit institutions is established in each of those Member States, one of which is the State,
(3) If—
(a) two or more credit institutions authorised in Member States have the same financial holding company as their parent, and
(b) those credit institutions have not been authorised in the Member State in which the financial holding company is established,
(4) In a case to which paragraph (3) applies, the credit institution authorised by the Bank is to be regarded, for the purposes of the Recast Credit Institutions Directive, as the credit institution controlled by an EU parent financial holding company.
(5) Despite paragraphs (1) to (3), in a particular case, the Bank may agree with the competent authority of another Member State that the other competent authority is to exercise supervision on a consolidated basis if, in the opinion of the Bank and that authority, it is appropriate to do so, having regard to the credit institutions concerned and the relative importance of their activities in the State and the other Member State.
(6) In entering into an agreement under paragraph (5), the Bank and the other competent authority concerned may appoint a different competent authority to exercise supervision on a consolidated basis.
(7) The Bank and the other competent authority concerned shall not make a decision under paragraph (5) without having given the following parties an opportunity to state their opinions on that decision:
(a) the EU parent credit institution;
(b) the EU parent financial holding company;
(c) of the credit institutions concerned, the one that had, at the end of its immediately preceding financial year, the largest balance sheet total.
(8) As soon as practicable after entering into an agreement under paragraph (5), the Bank shall notify the European Commission of the agreement and its contents.
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paragraphs: (1) Where appropriate, the Bank shall adopt such measures as are necessary to include financial holding companies in consolidated supervision.
(2) The consolidation of the financial situation of a financial holding company by the Bank does not require the Bank to supervise that company on a stand-alone basis.
(3) Paragraph (2) does not affect the operation of Regulation 17.
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paragraphs: (1) If a credit institution authorised by the Bank is not subject to supervision on a consolidated basis because the institution falls within one of the cases provided for in points (b) and (c) of Article 73(1) of the Recast Credit Institutions Directive, the parent undertaking of the institution (if any) shall, on being requested by the Bank to do so, provide the Bank with such information as it requires to facilitate its supervision of that institution.
(2) If the Bank is responsible for supervising a credit institution or a financial holding company on a consolidated basis, a subsidiary of the institution or holding company shall, on being requested to do so by the Bank, provide the Bank with any information relevant for the purpose of supervising the credit institution or holding company even though the subsidiary is not itself subject to supervision by the Bank on a consolidated basis. In such a case, the procedures for transmitting and verifying the information set out in Regulations 14 and 15 apply.
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paragraphs: (1) If the Bank is responsible for supervision on a consolidated basis, it shall, for the purposes of the supervision, require full consolidation of all credit institutions and financial institutions that are subsidiaries of a parent undertaking that it is responsible for supervising.
(2) However, the Bank may require only proportional consolidation if, in its opinion, the liability of a parent undertaking that is holding a share of the capital of the subsidiaries is limited to that share of the capital after taking into account the liability of the other shareholders or members whose solvency is satisfactory. In such a case, the liability of the other shareholders or members must be clearly established, if necessary by means of formal signed commitments.
(3) If the undertakings concerned are linked by a relationship within the meaning of Article 12(1) of the Consolidated Accounts Directive, the Bank shall determine how the consolidation is to be carried out.
(4) When the Bank is responsible for supervision on a consolidated basis, it shall require the proportional consolidation of participations in credit institutions and financial institutions managed by an undertaking that is included in the consolidation, together with one or more undertakings not included in the consolidation, if those undertakings’ liability is limited to the share of the capital that they hold.
(5) In the case of participations or capital ties other than those referred to in paragraphs (1) to (4), the Bank shall determine whether and how consolidation is to be carried out. In particular, the Bank may permit or require the use of the equity method, but the use of that method does not constitute inclusion of the undertakings concerned in supervision on a consolidated basis.
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paragraphs: (1) The Bank may determine whether and how consolidation is to be carried out in the following cases:
(a) if, in the opinion of the Bank, a credit institution exercises a significant influence over one or more other credit institutions or financial institutions without holding a participation or other capital ties in those institutions;
(b) if two or more credit institutions or financial institutions are placed under single management otherwise than in accordance with a contract, or their memoranda or articles of association.
(2) In particular, the Bank may permit, or require, use of the method provided for in Article 12 of the Consolidated Accounts Directive. However, the use of that method does not constitute the inclusion of the relevant undertakings in consolidated supervision.
(3) If the Bank requires consolidated supervision, ancillary services undertakings and asset management companies are to be included in the consolidation in the cases, and in accordance with the methods, prescribed by Regulation 7 and paragraphs (1) and (2) of this Regulation.
(4) Nothing in this Regulation limits Regulation 7.
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paragraphs: (1) If—
(a) the parent undertaking of a credit institution is a mixed-activity holding company, and
(b) the Bank is responsible for the supervision of the credit institution,
(2) Every credit institution under the supervision of the Bank shall maintain adequate risk management processes and internal control mechanisms (including sound reporting and accounting procedures) in order to identify, measure, monitor and control transactions with its parent mixed-activity holding company and its subsidiaries.
(3) A credit institution that is under the supervision of the Bank shall, if required by the Bank to do so, report any significant transaction with its parent mixed-activity holding company and that company’s subsidiaries (other than a transaction referred to in Regulation 56 of the European Communities (Capital Adequacy of Credit Institutions) Regulations 2006 ( S.I. No. 661 of 2006 )).
(4) The Bank is responsible for overviewing procedures and significant transactions referred to in this Regulation.
(5) If the intra-group transactions are a threat to a credit institution’s financial position, the Bank shall, if responsible for the supervision of the institution, take appropriate measures to deal with the threat.
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paragraphs: (1) The Bank shall co-operate closely with the competent authorities of the other Member States.
(2) Without limiting paragraph (1), the Bank shall provide other competent authorities with such information as is essential or relevant for the performance of those other authorities’ supervisory tasks under the Recast Credit Institutions Directive. In performing that function, the Bank shall—
(a) on being requested to do so, communicate relevant information to those other authorities, and
(b) on its own initiative, communicate all essential information to those other authorities.
(3) For the purposes of paragraph (2), information is to be regarded as essential if it could materially influence the assessment of the financial soundness of a credit institution or financial institution in another Member State.
(4) If the Bank is responsible for consolidated supervision of an EU parent credit institution and credit institutions controlled by an EU parent financial holding company, it shall provide the competent authorities of other Member States that supervise subsidiaries of that parent company with all relevant information. In determining the extent of relevant information, the Bank shall take into account the importance of those subsidiaries within the financial system of those Member States.
(5) The essential information referred to in paragraph (2) includes (but is not limited to) the following:
(a) identification of the group structure of all major credit institutions in a group, and the competent authority responsible for the supervision of each credit institution in the group;
(b) procedures for the collection of information from the credit institutions in a group, and the verification of that information;
(c) adverse developments in those credit institutions or in other entities of a group, which could seriously affect the credit institutions;
(d) any major sanctions and exceptional measures taken by competent authorities in accordance with the Recast Credit Institutions Directive, including—
(i) the imposition of an additional capital charge under Article 136 of that Directive, and
(ii) the imposition of any limitation on the use of the Advanced Measurement Approach for the calculation of the own funds requirements under Article 105 of that Directive.
(6) If the Bank is responsible for the supervision of credit institutions controlled by an EU parent credit institution, it shall whenever possible contact the relevant competent authority whenever it needs information regarding the implementation of approaches and methodologies specified in that Directive that may already be available to that authority.
(7) For the purposes of paragraph (6), the relevant competent authority is the competent authority responsible for the exercise of supervision on a consolidated basis of EU parent credit institutions and credit institutions controlled by EU parent financial holding companies.
(8) Before making a decision relating to an item that is of importance for another competent authority’s supervisory tasks, the Bank shall consult the other authority.
(9) For the purpose of paragraph (8), an item is of importance for another competent authority’s supervisory tasks if it involves—
(a) changes in the shareholder, organisational or management structure of credit institutions in a group that require the approval or authorisation of a competent authority, and
(b) major sanctions or exceptional measures taken by a competent authority, including the imposition of an additional capital charge under Article 136 of the Recast Credit Institutions Directive and the imposition of any limitation on the use of the Advanced Measurement Approaches for the calculation of the own funds requirements under Article 105 of that Directive.
(10) For the purposes of paragraph (9)(b), the Bank shall always consult the competent authority responsible for supervision on a consolidated basis, except that, in relation to a particular decision, the Bank may decide not to consult that authority if—
(a) the matter is urgent, or
(b) consultation could jeopardise the effectiveness of the decision.
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paragraphs: (1) When the Bank is responsible for supervision on a consolidated basis of credit institutions, financial holding companies and their respective subsidiaries, in order to facilitate and establish effective supervision, the Bank shall take all necessary steps to enter into arrangements with the competent authorities of the other Member States with a view to co-ordinating that supervision and co-operating with those authorities for that purpose.
(2) Without limiting paragraph (1), those arrangements may—
(a) entrust additional tasks to the Bank or other competent authority responsible for carrying out that supervision on a consolidated basis, and
(b) prescribe the procedures for making decisions relating to that supervision and for co-operating with those other authorities.
(3) If—
(a) the Bank is responsible for supervising a credit institution that is a subsidiary of a parent undertaking, and
(b) the competent authority of another Member State authorised and is responsible for supervising that undertaking,
(4) If—
(a) the competent authority of another Member State is responsible for supervising a credit institution that is a subsidiary of a parent undertaking, and
(b) the Bank authorised and is responsible for supervising that undertaking,
(5) As soon as practicable after entering into an agreement under paragraph (3) or (4), the Bank shall inform the European Commission in writing of the existence of the agreement and its contents.
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paragraphs: (1) If—
(a) a credit institution, financial holding company or a mixed-activity holding company controls one or more subsidiaries that are insurance companies, or are undertakings that provide investment services, and
(b) those companies or undertakings are subject to authorisation,
(2) Without limiting its other responsibilities, the Bank shall provide the competent authorities of those other Member States with any information that is likely to simplify their task and to allow supervision of the activities and the overall financial situation of the undertakings they supervise.
(3) The Bank shall keep secret information that it receives in the course of supervision on a consolidated basis, and in particular any exchange of information between competent authorities that is provided for in the Recast Credit Institutions Directive.
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paragraphs: The Bank shall co-operate with the competent authorities of the other Member States concerned in relation to credit institutions authorised in those other States—
(a) if those institutions are part of a group that is not subject to consolidated supervision under these Regulations, and
(b) if the parent of those institutions is another credit institution or a mixed financial holding company whose head office is located in a third country.
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paragraphs: (1) If a parent undertaking and any of its subsidiaries that are credit institutions are located in different Member States one of which is the State, the Bank shall communicate to the other competent authorities concerned all relevant information in its possession that could facilitate the exercise of supervision of those entities on a consolidated basis.
(2) If a parent undertaking is located in the State, but the Bank is not itself responsible for exercising supervision of those entities on a consolidated basis, the Bank shall, on being requested to do so by the competent authority responsible for supervising those entities on a consolidated basis, take all reasonable steps to obtain from the undertaking information that is relevant to exercising that supervision and to transmit to that authority any information so obtained.
(3) The communication or exchange by the Bank of information referred to in paragraph (1) does not, in relation to the collection or possession of information about a financial holding company, financial institution or ancillary services undertaking, imply that the Bank is required to perform a supervisory role in relation to the company, institution or undertaking standing alone.
(4) Similarly, the communication or exchange by the Bank of information referred to in Article 137 of the Recast Credit Institutions Directive in relation to a mixed-activity holding company or its subsidiaries does not in any way imply that the Bank performs a supervisory role in relation to that company or to such of its subsidiaries as are not credit institutions, or to subsidiaries that are not included within the scope of supervision by the Bank on a consolidated basis.
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paragraphs: (1) In this Regulation, “relevant entity” means—
(a) a credit institution, a financial holding company, a financial institution, an ancillary services undertaking, or a mixed-activity holding company,
(b) a subsidiary of the kind to which Article 127(3) of the Recast Credit Institutions Directive applies, or
(c) a subsidiary of the kind to which Article 137 of that Directive applies.
(2) On being requested by the competent authority of another Member State to verify information relating to a relevant entity that is located in the State, the Bank shall do one of the following:
(a) undertake a verification of the information itself;
(b) allow the authority to undertake the verification;
(c) allow an auditor or expert to undertake the verification.
(3) A competent authority of another Member State that has made a request to the Bank for the verification of information under paragraph (2) is entitled to participate in the verification if it does not undertake the verification itself.
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paragraphs: The Bank shall maintain a list of financial holding companies as required by Article 140(3) of the Recast Credit Institutions Directive and shall communicate that list on a regular basis to the European Commission and to the competent authorities within the Member States responsible for the supervision of credit institutions.
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paragraphs: (1) This Regulation applies only to a financial holding company that has its head office in the State.
(2) A financial holding company is required to take all reasonably practicable steps to ensure that the persons who are concerned in the direction or management of the company are suitably qualified, are of sufficiently good repute, and have sufficient experience, to be able to perform their duties in that capacity.
(3) The Bank may, by notice in writing, direct a financial holding company to provide it with such information concerning the qualifications, reputation and experience of the persons who are concerned in the direction or management of the company as is specified in the notice.
(4) If the Bank is satisfied on reasonable grounds that a person who is concerned in the direction or management of a financial holding company—
(a) is not suitably qualified,
(b) is not of sufficiently good repute, or
(c) does not have sufficient experience,
(5) A financial holding company shall not appoint a person to a position by virtue of which the person will be concerned in the direction or management of the company unless it has previously notified the Bank of the proposal to make the appointment. An appointment made in contravention of this paragraph is void.
(6) A financial holding company shall provide the Bank with such information as it requires concerning the qualifications, reputation and experience of a person referred to in paragraph (5).
(7) A financial holding company to which a direction has been notified under this Regulation shall comply with the direction within the period specified in the notice.
(8) The Bank is not liable in damages for any loss of office arising directly or indirectly out of the giving of a direction under paragraph (4).
(9) The Bank may, by further notice in writing, vary or revoke a direction notified to a financial holding company under this Regulation.
(10) A direction, and a variation or revocation of the direction, notified under this Regulation take effect from the date of the notice or, if a later date is specified in the notice, from that later date.
(11) A direction notified to a financial holding company under this Regulation and a variation of the direction are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .
(12) A person is concerned in the direction or management of a financial holding company for the purposes of this Regulation if the person—
(a) is a director of the company,
(b) not being a director of the company, has, in the opinion of the Bank, power to direct or control the affairs of the company,
(c) is the chief executive of the company, or
(d) holds any other management position to which the Bank’s published fitness and probity standards apply.
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paragraphs: (1) If a credit institution is not subject to consolidated supervision under a law that gives effect to the Recast Credit Institutions Directive, the Bank shall verify whether the institution is subject to consolidated supervision, by a third country competent authority, according to principles equivalent to those prescribed by that Directive.
(2) The Bank shall carry out the verification either at the request of the relevant parent undertaking or of any of the regulated entities authorised in a Member State or on its own initiative.
(3) In carrying out the verification, the Bank shall consult the competent authorities of any other Member States involved and the third country competent authority concerned.
(4) The Bank—
(a) shall consult the European Banking Committee before making a decision under this Regulation, and
(b) in carrying out the verification, shall take into account any guidance given to it by that Committee under Article 143 of the Recast Credit Institutions Directive.
(5) In the absence of equivalent supervision of the kind referred to in paragraph (1), the Bank shall apply either the provisions of the Recast Credit Institutions Directive to the credit institution by analogy or other appropriate supervisory techniques that will achieve the objectives of supervision of credit institutions on a consolidated basis. Those supervisory techniques must, after consultation with the competent authorities of any other Member States involved, be agreed to by the third country competent authority that would be responsible for consolidated supervision.
(6) For the purposes of this Regulation, the Bank—
(a) may require, as a prerequisite for or condition of authorisation, the establishment of a financial holding company that has its head office in a Member State,
(b) may require the consolidation of the financial holding company’s accounts with those of the credit institution referred to in paragraph (1), and
(c) may apply the supervision provisions of the European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992 ( S.I. No. 395 of 1992 ) and the provisions of these Regulations to the resulting consolidated position.
(7) The Bank shall ensure that the supervisory techniques are designed to achieve the objectives of consolidated supervision as defined in Chapter 4 of Title V of the Recast Credit Institutions Directive.
(8) As soon as practicable after taking action under this Regulation, the Bank shall notify the action taken to the competent authorities of the other Member State concerned and to the European Commission.
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paragraphs: An associated enterprise of a credit institution and, in the case of a credit institution that is a building society, an associated body of the credit institution, shall establish and maintain such internal reporting, managerial and technological arrangements as will ensure that the required information is capable of being provided to the Bank.
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paragraphs: (1) Sections 17A (as amended by item 2 of Part 6 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 (No. 12 of 2003)) and 18 (as amended by section 37 of the Central Bank Act 1989 (No. 16 of 1989)) of the Central Bank Act 1971 (No. 24 of 1971) apply to and in relation to a credit institution that is subject to consolidated supervision by the Bank as if—
(a) references in either of those sections to a holder of a licence under that Act were references to the credit institution, and
(b) references in either of those sections to a related body of a holder of such a licence were references to an associated enterprise of the credit institution.