2000L0012—EN—01.05.2004—003.001—1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B DIRECTIVE2000/12/ECOFTHEEUROPEANPARLIAMENTANDOFTHECOUNCIL
of20March2000
relatingtothetakingupandpursuitofthebusinessofcreditinstitutions
(OJL126,26.5.2000,p.1)
Amendedby:
OfficialJournal
No page date
►M1Directive2000/28/ECoftheEuropeanParliamentandoftheCouncilof
18September2000L275 37 27.10.2000
►M2Directive2002/87/ECoftheEuropeanParliamentandoftheCouncilof
16December2002L35 1 11.2.2003
Amendedby:
►A1Act concerning the conditions of accession of the Czech Republic, the
Republic of Estonia, the Republic of Cyprus, the Republic of Latvia,
the Republic of Lithuania, the Republic of Hungary, the Republic of
Malta,theRepublicofPoland,theRepublicofSloveniaandtheSlovakRepublic and the adjustments to the Treaties on which the EuropeanUnionisfoundedL236 33 23.9.2003
▼B
DIRECTIVE 2000/12/EC OF THE EUROPEAN PARLIAMENT
ANDOFTHECOUNCIL
of20March2000
relatingtothetakingupandpursuitofthebusinessofcreditinsti-
tutions
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEANUNION,
HavingregardtotheTreatyestablishingtheEuropeanCommunity,and
inparticularthefirstandthirdsentencesofArticle47(2)thereof,
HavingregardtotheproposalfromtheCommission,
Having regard to the opinion of the Economic and Social
Committee(1),
Acting in accordance with the procedure laid down in Article 251 of
theTreaty(2),
Whereas:
(1) CouncilDirective73/183/EECof28June1973ontheabolition
of restrictions on freedomof establishm ent and freedomtoprovide services in respect of self-employed activities of banksand other financial institutions(
3), first Council Directive (77/
780/EEC) of 12 December 1977 on the coordination of laws,
regulations and administrative provisions relating to the taking
up and pursuit of the business of credit institutions(4), Council
Directive 89/299/EEC of 17 April 1989 on the own funds ofcredit institutions(
5), second Council Directive 89/646/EEC of
15December 1989onthecoordination oflaws,regulations andadministrativeprovisionsrelatingtothetakingupandpursuitof
the business of credit institutions(
6), Council Directive 89/647/
EECof18December1989onasolvencyratioforcreditinstitu-tions(
7), Council Directive 92/30/EEC of 6 April 1992 on the
supervisionofcredit institutions ona consolidated basis(8),and
Council Directive 92/121/EEC of 21 December 1992 on the
monitoring and control of large exposures of credit institu-
tions(9) have been frequently and substantially amended. For
reasons of clarity and rationality, the said Directives therefore,shouldbecodifiedandcombinedinasingletext.
(2) PursuanttotheTreaty,anydiscriminatorytreatmentwithregard
toestablishmentandtotheprovisionofservices,basedeitheron
nationalityoronthefactthatanundertakingisnotestablishedin
theMemberStatewheretheservicesareprovided,isprohibited.
(3) Inordertomakeiteasiertotakeupandpursuethebusinessof
credit institutions, it is necessary to eliminate the most obstruc-tive differences between the laws of the Member States as
regardstherulestowhichtheseinstitutionsaresubject.
(4) This Directive constitutes the essential instrument for the
achievement of the internal market, a course determined by the2000L0012—EN—01.05.2004—003.001—2
(1) OJC157,25.5.1998,p.13.
(2) OpinionoftheEuropean Parliament of18January2000(notyetpublished
in the Official Journal) and Council Decision of 13 March 2000 (not yet
publishedintheOfficialJournal).
(3) OJL194,16.7.1973,p.1.
(4) OJL322,17.12.1977,p.30.DirectiveaslastamendedbyDirective98/33/
EC(OJL204,21.7.1998,p.29).
(5) OJ L 124, 5.5.1989, p. 16. Directive as last amended by Directive 92/30/
EEC(OJL110,28.4.1992,p.52).
(6) OJ L 386, 30.12.1989, p. 1. Directive as last amended by Directive 95/26/
EC(OJL168,18.7.1995,p.7).
(7) OJL386,30.12.1989,p.14.DirectiveaslastamendedbyDirective98/33/
EC.
(8) OJL110,28.4.1992,p.52.
(9) OJ L 29, 5.2.1993, p. 1. Directive as amended by the 1994 Act of Acces-
sion.
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Single European Act and set out in timetable form in the
Commission's White Paper, from the point of view of both thefreedomof establishm ent and the freedomto provide financial
services,inthefieldofcreditinstitutions.
(5) Measurestocoordinate credit institutions must,bothinorderto
protect savings and to create equal conditions of competitionbetween these institutions, apply to all of them. Due regardmust be had, where applicable, to the objective differences intheir statutes and their proper aims as laid down by nationallaws.
(6) The scope of those measures should therefore be as broad as
possible, covering all institutions whose business is to receive
repayablefundsfromthepublic,whetherintheformofdepositsorinotherformssuchasthecontinuingissueofbondsandothercomparablesecuritiesandtograntcreditsfortheirownaccount.Exceptions must be provided for in the case of certain creditinstitutionstowhichthisDirectivecannotapply.Theprovisions
of this Directive shall not prejudice the application of national
laws which provide for special supplementary authorisationspermitting credit institutions to carry on specific activities orundertakespecifickindsofoperations.
(7) The approach which has been adopted is to achieve only the
essential harmonisation necessary and sufficient to secure themutualrecognitionofauthorisationandofprudentialsupervision
systems,makingpossiblethegrantingofasinglelicencerecog-
nised throughout the Community and the application of theprinciple of home Member State prudential supervision. There-fore, the requirement that a programme of operations must beproducedshouldbeseenmerelyasafactorenablingthecompe-
tent authorities to decide on the basis of more precise
information using objective criteria. A measure of flexibilitymay none the less be possible as regards the requirements onthelegal formofcreditinstitutionsoftheprotection ofbankingnames.
(8) Equivalentfinancialrequirementforcreditinstitutionsareneces-
sarytoensuresimilarsafeguardsforsaversandfairconditionsof
competition between comparable groups of credit institutions.
Pendingfurthercoordination,appropriatestructuralratiosshouldbeformulatedthatwillmakeitpossiblewithintheframeworkofcooperation between national authorities to observe, in accor-dance with standard methods, the position of comparable typesof credit institutions. This procedure shouldhelp to bring about
the gradual approximation of the systems of coefficients estab-
lished and applied by the Member States. It is necessary,however to make a distinction between coefficients intended toensure the sound management of credit institutions and thoseestablishedforthepurposesofeconomicandmonetarypolicy.
(9) The principles of mutual recognition and home Member State
supervision require that Member States' competent authorities
shouldnotgrantorshouldwithdrawauthorisationwherefactors
such as content of the activities programmes, the geographicaldistribution or the activities actually carried on indicate clearlythat a credit institution has opted for the legal systemof oneMember State for the purpose of evading the stricter standards
in force in another Member State within whose territory it
carriesonorintendstocarryonthegreaterpartofitsactivities.Acreditinstitutionwhichisalegalpersonmustbeauthorisedinthe Member State in which it has its registered office. A creditinstitutionwhichisnotalegalpersonmusthaveitsheadofficeintheMemberStateinwhichithasbeenauthorised.Inaddition,
MemberStatesmustrequirethatacreditinstitution'sheadoffice
alwaysbesituatedinitshomeMemberStateandthatitactuallyoperatesthere.
(10) The competent authorities should not authorise or continue the
authorisation of a credit institution where they are liable to bepreventedfromeffectivelyexercisingtheirsupervisoryfunctionsby the close links between that institution and other natural or2000L0012—EN—01.05.2004—003.001—3
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legal persons. Credit institutions already authorised must also
satisfy the competent authorities in that respect. The definitionof ‘close links’ in this Directive lays down minimum criteria.
That doesnot prevent Member States from applying it to situa-
tionsotherthanthoseenvisagedbythedefinition.Thesolefactof having acquired a significant proportion of a company'scapital does not constitute participation, within the meaning of‘close links’, if that holding has been acquired solely as a
temporary investment which does not make it possible to exer-
cise influence over the structure or financial policy of theinstitution.
(11) Thereferencetothesupervisoryauthorities'effectiveexerciseof
theirsupervisoryfunctions coverssupervisiononaconsolidatedbasiswhichmustbeexercisedoveracreditinstitutionwheretheprovisions of Community law so provide. In such cases, theauthorities applied to for authorisation must be able to identify
the authorities competent to exercise supervision on a consoli-
datedbasisoverthatcreditinstitution.
(12) The home Member State may also establish rules stricter than
those laid down in Article 5(1), first subparagraph and (2), and
Articles 7, 16, 30, 51 and 65 for institutions authorised by itscompetentauthorities.
(13) Theabolitionoftheauthorisationrequirementwithrespecttothe
branchesofCommunitycreditinstitutionsnecessitatestheaboli-tionofendowmentcapital.
(14) By virtue of mutual recognition, the approach chosen permits
credit institutions authorised in their home Member States tocarryon,throughouttheCommunity,anyoralloftheactivitieslisted in Annex I by establishing branches or by providingservices. The carrying-on of activities not listed in the said
Annex enjoys the right of establishment and the freedom to
provideservicesunderthegeneralprovisionsoftheTreaty.
(15) It is appropriate, however to extend mutual recognition to the
activitieslistedinAnnexIwhentheyarecarriedonbyfinancialinstitutionswhicharesubsidiariesofcreditinstitutions,providedthat such subsidiaries are covered by the consolidated supervi-sion of their parent undertakings and meet certain strictconditions.
(16) ThehostMemberStatemay,inconnection withtheexerciseof
the right of establishment and the freedom to provide services,
require compliance with specific provisions of its own national
laws or regulations on the part of institutions not authorised ascredit institutions in their home Member States andwith regardtoactivitiesnotlistedinAnnexIprovidedthat,ontheonehand,such provisions are compatible with Community law and areintended to protect the general good and that, on the other
hand, such institutions or such activities are not subject to
equivalent rules under this legislation or regulations of theirhomeMemberStates.
(17) The Member States must ensure that there are no obstacles to
carrying on activities receiving mutual recognition in the samemanner as in the home Member State, as long as the latter donotconflict withlegal provisionsprotecting thegeneral goodinthehostMemberState.
(18) ThereisanecessarylinkbetweentheobjectiveofthisDirective
andtheliberalisationofcapital movementsbeing broughtaboutby other Community legislation. In any case the measures
regarding the liberalisation of banking services must be in
harmonywiththemeasuresliberalisingcapitalmovements.
(19) The rules governing branches of credit institutions having their
head office outside the Community should be analogous in allMember States. It is important at the present time to providethat such rules may not be more favourable than those forbranches of institutions fromanother Mem ber State. It shouldbespecifiedthattheCommunitymayconcludeagreementswith2000L0012—EN—01.05.2004—003.001—4
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third countries providing for the application of rules which
accordsuchbranchesthesametreatmentthroughoutitsterritory,accountbeingtakenoftheprincipleofreciprocity.Thebranches
of credit institutions authorised in third countries do not enjoy
the freedomto provide services under the second paragraph ofArticle 49 of the Treaty or the freedomof establishm ent inMember States other than those in which they are established.However,requestsfortheauthorisation ofsubsidiariesorofthe
acquisition of holdings made by undertakings governed by the
laws of third countries are subject to a procedure intended toensure that Community credit institutions receive reciprocaltreatmentinthethirdcountriesinquestion.
(20) Theauthorisationsgrantedtocreditinstitutionsbythecompetent
national authorities pursuant to this Directive have Community-wide, and no longer merely nationwide, application. Existing
reciprocityclauseshavethereforenoeffect.Aflexibleprocedure
isthereforeneededtomakeitpossibletoassessreciprocityonaCommunity basis.The aim ofthisprocedure isnotto close theCommunity's financial markets but rather, as the Communityintends to keep its financial markets open to the rest of the
world, to improve the liberalisation of the global financial
markets in other third countries. To that end, this Directiveprovidesforproceduresfornegotiatingwiththirdcountriesand,as a last resort, for the possibility of taking measures involvingthe suspension of new applications for authorisation or therestrictionofnewauthorisations.
(21) Itisdesirablethatagreement shouldbereached,onthebasisof
reciprocity, between the Community and third countries with a
view to allowing the practical exercise of consolidated supervi-sionoverthelargestpossiblegeographicalarea.
(22) Responsibilityforsupervisingthefinancialsoundnessofacredit
institution, and in particular its solvency, rests with the compe-tent authorities of its home Member State. The host Member
State'scompetentauthoritiesretainresponsibilityforthesupervi-
sionofliquidityandmonetarypolicy.Thesupervisionofmarketrisk must be the subject of close cooperation between thecompetentauthoritiesofthehomeandhostMemberStates.
(23) The smooth operation of the internal banking market requires
not only legal rules but also close and regular cooperationbetween the competent authorities of the Member States. For
theconsideration ofproblemsconcerningindividualcreditinsti-
tutions the ‘groupe de contact’ (contact group) set up betweenthebankingsupervisoryauthoritiesremainsthemostappropriateforum.ThatgroupisasuitablebodyforthemutualexchangeofinformationprovidedforinArticle28.
(24) Thatmutualinformation proceduredoesnotinanycasereplace
thebilateralcollaborationestablishedbyArticle28.Thecompe-
tenthostMemberStateauthoritiescan,withoutprejudicetotheirpowers of proper control, continue either, in an emergency, ontheir own initiative or following the initiative of the competenthomeMemberStateauthorities, toverifythattheactivities ofacredit institution established within their territories comply with
therelevantlawsandwiththeprinciplesofsoundadministrative
andaccountingproceduresandadequateinternalcontrol.
(25) It is appropriate to allow the exchange of information between
the competent authorities and authorities or bodies which, byvirtue of their function, help to strengthen the stability of thefinancial system. In order to preserve the confidential nature of
the information forwarded, the list of addressees must remain
withinstrictlimits.
(26) Certainbehaviour,suchasfraudandinsideroffences,isliableto
affect the stability, including the integrity, of the financialsystem, even when involving institutions other than credit insti-tutions.
(27) It is necessary to specify the conditions under which such
exchangesofinformationareauthorised.2000L0012—EN—01.05.2004—003.001—5
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(28) Where it is stipulated that information may be disclosed only
with the express agreement of the competent authorities, thesemay,whereappropriate,maketheiragreementsubjecttocompli-
ancewithstrictconditions.
(29) Exchangesofinformationbetween,ontheonehand,thecompe-
tentauthoritiesand,ontheother,centralbanksandotherbodieswitha similar function in their capacity as monetary authoritiesand, where appropriate, other public authorities responsible forsupervisingpaymentsystemsshouldalsobeauthorised.
(30) For the purpose of strengthening the prudential supervision of
credit institutions and protection of clients ofcredit institutions,
itshouldbestipulatedthatanauditormusthaveadutytoreport
promptlytothecompetentauthorities,wherever,asprovidedforby this Directive, he becomes aware, while carrying out histasks, of certain facts which are liable to have a serious effecton the financial situation or the administrative and accountingorganisation of a credit institution. Having regard to the aimin
view,itisdesirablefortheMemberStatetoprovidethatsucha
duty should apply in all circumstances where such facts arediscovered byanauditor during the performance ofhistasksinan undertaking which has close links with a credit institution.The duty of auditors to communicate, where appropriate, to the
competent authorities certain facts and decisions concerning a
creditinstitution whichtheydiscoverduringtheperformance oftheir tasks in a non-financial undertaking does not in itselfchange the nature of their tasks in that undertaking nor themanner in which they must perform those tasks in that under-taking.
(31) Commonbasicstandardsfortheownfundsofcreditinstitutions
are a key factor in the creation of an internal banking market
since ownfundsserve to ensure the continuity of credit institu-
tionsandtoprotectsavings.Suchharmonisationstrengthensthesupervisionofcreditinstitutionsandcontributestofurthercoor-dinationinthebankingsector.
(32) Suchstandardsmustapplytoallcreditinstitutionsauthorisedin
theCommunity.
(33) Theownfundsofacreditinstitutionscanservetoabsorblosses
which are not matched by a sufficient volume of profits. The
ownfundsalsoserveasanimportantyardstickforthecompetent
authorities, in particular for the assessment of the solvency ofcreditinstitutionsandforotherprudentialpurposes.
(34) Credit institutions, in an internal banking market, engage in
directcompetitionwitheachother,andthedefinitionsandstan-dards pertaining to own funds must therefore be equivalent. Tothat end, the criteria for determining the composition of ownfunds must not be left solely to Member States. The adoption
of common basic standards will be in the best interests of the
Community in that it will prevent distortions of competitionandwillstrengthentheCommunitybankingsystem.
(35) ThedefinitionofownfundslaiddowninthisDirectiveprovides
for a maximum of items and qualifying amounts, leaving it tothe discretion of each Member State to useall orsome of suchitemsortoadoptlowerceilingsforthequalifyingamounts.
(36) This Directive specifies the qualifying criteria for certain own
funds items, and the Member States remain free to apply more
stringentprovisions.
(37) Attheinitialstagecommonbasicstandardsaredefinedinbroad
termsinordertoencompassalltheitemsmakingupownfundsinthedifferentMemberStates.
(38) Accordingtothenatureoftheitemsmakingupownfunds,this
Directive distinguishes between on the one hand, items consti-tuting original own funds and, on the other, those constitutingadditionalownfunds.
(39) To reflect the fact that items constituting additional own funds
are not of the same nature as those constituting original own2000L0012—EN—01.05.2004—003.001—6
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funds,theamountoftheformerincludedinownfundsmustnot
exceedtheoriginalownfunds.Moreover,theamountofcertainitemsofadditionalownfundsincludedmustnotexceedonehalf
oftheoriginalownfunds.
(40) Inordertoavoiddistortionsofcompetition,publiccreditinstitu-
tions must not include in their own funds guarantees grantedthembytheMemberStatesorlocalauthorities.
(41) Whenever in the course of supervision it is necessary to deter-
mine the amount of the consolidated own funds of a group ofcreditinstitutions,thecalculationshallbeeffectedinaccordancewiththisDirective.
(42) The precise accounting technique to be used for the calculation
of own funds, the solvency ratio, and for the assessment of theconcentration of exposures must take account of the provisionsof Council Directive 86/635/EEC of 8 December 1986 on the
annual accounts and consolidated accounts of banks and other
financial institutions(
1), which incorporates certain adaptations
of the provisions of Council Directive 83/349/EEC of 13 June1983 based on Article 44(2)(g) of the Treaty on consolidatedaccounts(
2).
(43) Theprovisionsonownfundsformpartofthewiderinternational
efforttobringaboutapproximationoftherulesinforceinmajorcountriesregardingtheadequacyofownfunds.
(44) TheCommissionwilldrawupareportandperiodicallyexamine,
with the aimof tightening them , the provisions on own fundsandthusachievinggreaterconvergenceonacommondefinitionof own funds. Such convergence will allow the alignment ofCommunitycreditinstitutions'ownfunds.
(45) The provisions on solvency ratios are the outcome of work
carried out by the Banking Advisory Committee which isresponsible for making suggestions to the Commission with aview to coordinating the coefficients applicable in the MemberStates.
(46) The establishment of an appropriate solvency ratio plays a
centralroleinthesupervisionofcreditinstitutions.
(47) A ratio which weights assets and off-balance-sheet items
according to the degree of credit risk is a particularly useful
measureofsolvency.
(48) Thedevelopmentofcommonstandardsforownfundsinrelation
to assets and off-balance-sheet items exposed to credit risk is,
accordingly, an essential aspect of the harmonisation necessary
for the achievement of the mutual recognition of supervisiontechniques and thus the completion of the internal bankingmarket.
(49) In that respect, the provisions on a solvency ratio must be
considered in conjunction with other specific instruments alsoharmonising the fundamental techniques of the supervision ofcreditinstitutions.
(50) In an internal banking market, institutions are required to enter
into direct competition with one another and the commonsolvency standards in the form of a minimum ratio preventdistortions of competition and strengthen the Communitybankingsystem.
(51) This Directive provides for different weightings to be given to
guarantees issued by different financial institutions. TheCommission accordingly undertakes to examine whether thisDirective taken as a whole significantly distorts competitionbetween credit institutions and insurance undertakings and, in2000L0012—EN—01.05.2004—003.001—7
(1) OJL372,31.12.1986,p.1.
(2) OJ L 193, 18.7.1983, p. 1. Directive as last amended by Directive 90/605/
EEC(OJL317,16.11.1990,p.60).
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the light of that examination, to consider whether any remedial
measuresarejustified.
(52) AnnexIIIlaysdownthetreatment ofoff-balance-sheet itemsin
the context of the calculation of credit institutions' capitalrequirements. With a view to the smooth functioning of theinternalmarketandinparticularwithaviewtoensuringalevelplaying field Member States are obliged to strive for uniformassessmentofcontractual nettingagreementsbytheircompetent
authorities. Annex III takes account of the work of an interna-
tional forumof banking supervisors on the supervisoryrecognition of bilateral netting, in particular the possibility ofcalculating the own-funds requirements for certain transactionson the basis of a net rather than a gross amount provided that
therearelegallybindingagreementswhichensurethatthecredit
risk is confined to the net amount. For internationally activecredit institutions and groups of credit institutions in a widerange ofthird countries, whichcompete withCommunity creditinstitutions, the rules adopted on the wider international levelwillresultinarefinedsupervisorytreatmentofover-the-counter
(OTC)derivative instruments. Thisrefinement resultsinamore
appropriate compulsory capital cover taking into account therisk-reducing effects of supervisorily recognised contractualnetting agreements on potential future credit risks. The clearingof OTC derivative instruments provided by clearing houses
actingasacentralcounterpartyplaysanimportantroleincertain
Member States. It is appropriate to recognise the benefits fromsuchaclearingintermsofareductionofcreditriskandrelatedsystemic risk in the prudential treatment of credit risk. It isnecessary for the current and potential future exposures arisingfromclearedOTCderivativescontractstobefullycollateralised
and for the risk of a build-up of the clearing house's exposures
beyondthemarketvalueofpostedcollateraltobeeliminatedinorderforclearedOTCderivativestobegrantedforatransitionalperiodthesameprudential treatment asexchange-traded deriva-tives.Thecompetentauthoritiesmustbesatisfiedastothelevel
of the initial margins and variation margins required and the
quality of and the level of protection provided by the postedcollateral. For credit institutions incorporated in the MemberStates,AnnexIIIcreatesasimilarpossibilityfortherecognitionof bilateral netting by the competent authorities and therebyoffers themequal conditions of com petition. The rules are both
well balanced and appropriate for the further reinforcement of
theapplicationofprudentialsupervisorymeasurestocreditinsti-tutions. The competent authorities in the Member States shouldensurethatthecalculationofadd-onsisbasedoneffectiveratherthanapparentnationalamounts.
(53) Theminimum ratioprovidedforinthisDirective reinforces the
capital of credit institutions in the Community. A level of 8 %hasbeenadoptedfollowingastatisticalsurveyofcapitalrequire-mentsinforceatthebeginningof1988.
(54) Theessentialrulesformonitoringlargeexposuresofcreditinsti-
tutionsshouldbeharmonised.MemberStatesshouldstillbeable
to adopt provisions more stringent than those provided for bythisDirective.
(55) Themonitoringandcontrol ofa credit institution's exposuresis
an integral part of its supervision. Excessive concentration of
exposures to a single client or group of connected clients may
result in an unacceptable risk of loss. Such a situation may beconsideredprejudicialtothesolvencyofacreditinstitution.
(56) Inaninternal bankingmarket, credit institutions areengaged in
directcompetitionwithoneanotherandmonitoringrequirements
throughout the Community should therefore be equivalent. To
thatend,thecriteriaappliedtodeterminingtheconcentrationofexposures must be the subject of legally binding rules atCommunitylevelandcannotbeleftentirelytothediscretionoftheMemberStates.TheadoptionofcommonruleswillthereforebestservetheCommunity'sinterests,sinceitwillpreventdiffer-2000L0012—EN—01.05.2004—003.001—8
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ences in the conditions of competition, while strengthening the
Community'sbankingsystem.
(57) Theprovisionsonasolvencyratioforcreditinstitutionsinclude
alistofcreditriskswhichmaybeincurredbycreditinstitutions.Thatlistshouldthereforebeusedalsoforthedefinitionofexpo-sures for the purposes of limits to large exposures. It is not,however, appropriate to refer on principle to the weightings ordegrees of risk laid down in the said provisions. Those weight-
ings and degrees of risk were devised for the purpose of
establishing a general solvency requirement to cover the creditriskofcreditinstitutions.Inthecontextoftheregulationoflargeexposures, the aim is to limit the maximum loss that a creditinstitution may incur through any single client or group of
connected clients. It is therefore appropriate to adopt a prudent
approach in which, as a general rule, account is taken of thenominal value of exposures, but no weightings or degrees ofriskareapplied.
(58) When a credit institution incurs an exposure to its own parent
undertaking or to other subsidiaries of its parent undertaking,
particular prudence is necessary. The management of exposuresincurred by credit institutions must be carried out in a fullyautonomousmanner, inaccordance withtheprinciples ofsoundbankingmanagement,withoutregardtoanyconsiderationsotherthanthoseprinciples.TheprovisionofthisDirectiverequirethat
where the influence exercised by persons directly or indirectly
holdingaqualifying participationinacredit institution islikelyto operate to the detriment of the sound and prudent manage-ment of that institution, the competent authorities shall takeappropriatemeasurestoputanendtothatsituation.Inthefield
of large exposures, specific standards should also be laid down
for exposures incurred by a credit institution to its own group,and in such cases more stringent restrictions are justified thanfor other exposures. More stringent restrictions need not,however be applied where the parent undertaking is a financialholdingcompanyoracreditinstitutionorwheretheothersubsi-
diaries are either credit or financial institutions or undertakings
offeringancillarybankingservices,providedthatallsuchunder-takingsarecoveredbythesupervisionofthecreditinstitutionona consolidated basis. In such cases the consolidated monitoringof the group of undertakings allows for an adequate level of
supervision, and does not require the imposition of more strin-
gent limits on exposure. Under this approach banking groupswill also be encouraged to organise their structures in such away as to allow consolidated monitoring, which is desirablebecauseamorecomprehensivelevelofmonitoringispossible.
(59) Inordertobeeffective,supervisiononaconsolidatedbasismust
be applied to all banking groups, including those the parentundertakingsofwhicharenotcreditinstitutions.Thecompetentauthorities must hold the necessary legal instruments to be abletoexercisesuchsupervision.
(60) Inthecaseofgroupswithdiversifiedactivitiestheparentunder-
takingsofwhichcontrolatleastonecreditinstitutionsubsidiary,
the competent authorities must be able to assess the financialsituation of a credit institution in such a group. Pending subse-quent coordination, the Member States may lay downappropriatemethodsofconsolidationfortheachievement ofthe
objective of this Directive. The competent authorities must at
least have the means of obtaining from all undertakings withina group the information necessary for the performance of theirfunction. Cooperation between the authorities responsible forthesupervisionofdifferentfinancialsectorsmustbeestablishedin the case of groups of undertakings carrying on a range of
financialactivities.
(61) The Member States can, furthermore, refuse or withdraw
banking authorisation in the case of certain group structuresconsidered inappropriate for carrying on banking activities, inparticularbecausesuchstructurescouldnotbesupervisedeffec-2000L0012—EN—01.05.2004—003.001—9
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tively.Inthisrespectthecompetent authoritieshavethepowers
mentionedinthefirstsubparagraphofArticle7(1),Article7(2),point (c) of Article 14(l), and Article 16 of this Directive, in
order to ensure the sound and prudent management of credit
institutions.
(62) The Member States can equally apply appropriate supervision
techniques to groups with structures not covered by this Direc-
tive. If such structures become common, this Directive should
beextendedtocoverthem.
(63) Supervision on a consolidated basis must take in all activities
defined in Annex I. All undertakings principally engaged insuch activities must therefore be included in supervision on a
consolidatedbasis.Asaresult,thedefinitionoffinancialinstitu-
tionsmustbewidenedinordertocoversuchactivities.
(64) Directive 86/635/EEC, together with Directive 83/349/EEC,
established the rules of consolidation applicable to consolidated
accounts publishedbycredit institutions. Itistherefore possible
to define more precisely the methods to be used in prudentialsupervisionexercisedonaconsolidatedbasis.
(65) Supervisionofcreditinstitutionsonaconsolidatedbasismustbe
aimed at, in particular, protecting the interests of the depositors
ofthesaidinstitutionsandensuringthestabilityofthefinancial
system.
(66) Theexaminationofproblemsconnectedwithmatterscoveredby
this Directive as well as by other Directive on the business ofcredit institutions requires cooperation between the competent
authorities and the Commission within a banking advisory
committee, particularly when conducted with a view to closercoordination. The Banking Advisory Committee of the compe-tent authorities of the Member States does not rule out otherforms of cooperation between authorities which supervise the
taking up and pursuit of the business of credit institutions and,
inparticular,cooperationwithinthe‘groupedecontact’(contactgroup)setupbetweenthebankingsupervisoryauthorities.
(67) Technical modifications to the detailed rules laid down in this
Directive may from time to time be necessary to take account
of new developments in the banking sector. The Commission
shallaccordinglymakesuchmodificationsasarenecessary,afterconsultingtheBankingAdvisoryCommittee,withinthelimitsofthe implementing powers conferred on the Commission by theTreaty. The measures necessary for the implementation of this
Directive should be adopted in accordance with Council Deci-
sion 1999/468/EC of 28 June 1999 laying down the proceduresfor the exercise of implementing powers conferred on theCommission(
1).
(68) Article36(1)ofthisDirectivepermitsjointandseveralcommit-
mentsofborrowersinthecaseofcreditinstitutionsorganisedas
cooperative societies or funds to be treated as own funds itemsunderArticle34(2)(7).TheDanishGovernmenthasexpressedastrong interest in having its few mortgage credit institutionsorganisedascooperativesocietiesorfundsconvertedintopubliclimited liability companies. In order to facilitate the conversion
ortomakeitpossible,atemporaryderogationallowingthemto
includepartoftheirjointandseveralcommitmentsasownfundsis required. This temporary derogation should not adverselyaffectcompetitionbetweencreditinstitutions.
(69) Theapplication ofa20%weightingtocreditinstitutions'hold-
ingsofmortgagebondsmayunsettleanationalfinancialmarketonwhichsuchinstrumentsplayapreponderantrole.Inthiscase,provisional measures are taken to apply a 10 % risk weighting.Themarketforsecuritisationisundergoingrapiddevelopment.Itistherefore desirable that the Commission shouldexamine with2000L0012—EN—01.05.2004—003.001—10
(1) OJL184,17.7.1999,p.23.
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theMemberStatestheprudentialtreatmentofasset-backedsecu-
rities andputforward,before 22June1999,proposalsaimed atadapting existing legislation in order to define an appropriate
prudential treatment for asset-backed securities. The competent
authoritiesmayauthorisea50%weightingtoassetssecuredbymortgages on offices or on multipurpose commercial premisesuntil 31 December 2006. The property to which the mortgagerelates must be subject to rigorous assessment criteria and
regular revaluation to take account of the developments in the
commercial property market. The property mustbe either occu-pied or let by the owner. Loans for property development areexcludedfromthis50%weighting.
(70) In order to ensure harmonious application of the provisions on
large exposures, Member States should be allowed to providefor the two-stage application of the new limits. For smallercreditinstitutions,alongertransitionalperiodmaybewarrantedinasmuch as too rapid an application of the 25 % rule couldreducetheirlendingactivitytooabruptly.
(71) Moreover, the harmonisation of the conditions relating to the
reorganisation and winding-up of credit institutions is alsoproceeding.
(72) Thearrangementsnecessaryforthesupervisionofliquidityrisks
willalsohavetobeharmonised.
(73) This Directive must no affect to obligations of the Member
States concerning the deadlines for transposition set out in
AnnexV,PartB,
HAVEADOPTEDTHISDIRECTIVE:2000L0012—EN—01.05.2004—003.001—11
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CONTENTS
TITLEI DEFINITIONSANDSCOPE
Article1 Definitions
Article2 Scope
Article3 Prohibitionforundertakingsotherthancreditinstitutionsfromcarryingon
thebusinessoftakingdepositsorotherrepayablefundsfromthepublic
TITLEII REQUIREMENTS FOR ACCESS TO THE TAKING UP AND
PURSUITOFTHEBUSINESSOFCREDITINSTITUTIONS
Article4 Authorisation
Article5 Initialcapital
Article6 Managementbodyandplaceoftheheadofficeofcreditinstitutions
Article7 Shareholdersandmembers
Article8 Programmeofoperationsandstructuralorganisation
Article9 Economicneeds
Article10 Authorisationrefusal
Article11 NotificationoftheauthorisationtotheCommission
Article12 PriorconsultationwiththecompetentauthoritiesofotherMemberStates
Article13 BranchesofcreditinstitutionsauthorisedinanotherMemberState
Article14 Withdrawalofauthorisation
Article15 Name
Article16 QualifyingholdinginacreditinstitutionArticle17 Proceduresandinternalcontrolmechanisms
TITLEIII PROVISIONS CONCERNING THE FREEDOM OF ESTABLISH-
MENTANDTHEFREEDOMTOPROVIDESERVICES
Article18 Creditinstitutions
Article19 Financialinstitutions
Article20 Exerciseoftherightofestablishment
Article21 Exerciseofthefreedomtoprovideservices
Article22 PowerofthecompetentauthoritiesofthehostMemberState
TITLEIV RELATIONSWITHTHIRDCOUNTRIES
Article23 Notification ofthesubsidiariesofthirdcountries'undertakingsandcondi-
tionsofaccesstothemarketsofthesecountries
Article24 Branches of credit institutions having their head offices outside the
Community
Article25 Cooperation withthird countries' competent authorities regarding supervi-
siononaconsolidatedbasis
TITLEV PRINCIPLES AND TECHNICAL INSTRUMENTS FOR PRUDEN-
TIALSUPERVISION
Chapter1 Principles ofprudentialsupervision
Article26 CompetenceofcontrolofthehomeMemberState
Article27 CompetenceofthehostMemberState
Article28 CollaborationconcerningsupervisionArticle29 On-the-spotverificationofbranchesestablishedinanotherMemberState
Article30 Exchangeofinformationandprofessionalsecrecy2000L0012—EN—01.05.2004—003.001—12
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Article31 Duty of persons responsible for the legal control of annual and consoli-
datedaccounts
Article32 PowerofsanctionofthecompetentauthoritiesArticle33 Righttoapplytothecourts
Chapter2 Technicalinstrumentsofprudentialsupervision
Section 1 Ownfunds
Article34 Generalprinciples
Article35 Otheritems
Article36 OtherprovisionsconcerningownfundsArticle37 Calculationofownfundsonaconsolidatedbasis
Article38 Deductionsandlimits
Article39 Provisionofprooftothecompetentauthorities
Section 2 Solvency ratio
Article40 Generalprinciples
Article41 Thenumerator:ownfunds
Article42 Thedenominator:risk-adjustedassetsandoff-balance-sheetitems
Article43 RiskweightingsArticle44 Weighting of claims for regional governments or local authorities of the
MemberStates
Article45 Otherweighting
Article46 Administrativebodiesandnon-commercialundertakings
Article47 Solvencyratiolevel
Section 3 Largeexposures
Article48 Reportingoflargeexposures
Article49 Limitsonlargeexposures
Article50 Supervisiononaconsolidatedorunconsolidatedbasisoflargeexposures
Section 4 Qualifiying holdingsoutsidethefinancial sector
Article51 Limitstonon-financialqualifyingholdings
Chapter3 Supervisiononaconsolidatedbasis
Article52 Supervisiononaconsolidatedbasisofcreditinstitutions
Article53 Competentauthorities responsibleforexercisingsupervisiononaconsoli-
datedbasis
Article54 FormandextentofconsolidationArticle55 Informationtobesuppliedbymixed-activity holdingcompaniesandtheir
subisidiaries
Article56 Measurestofacilitatesupervisiononaconsolidatedbasis
TITLEVI BANKINGADVISORYCOMMITTEE
Article57 CompositionandtasksoftheBankingAdvisoryCommittee
Article58 Examinationoftherequirementsforauthorisation
Article59 Observationratios
TITLEVII POWERSOFEXECUTION
Article60 Technicaladaptations2000L0012—EN—01.05.2004—003.001—13
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TITLEVIII TRANSITIONALANDFINALPROVISIONS
Chapter1 Transitionalprovisions
Article61 TransitionalprovisionsregardingArticle36
Article62 TransitionalprovisionsregardingArticle43
Article63 TransitionalprovisionsregardingArticle47Article64 TransitionalprovisionsregardingArticle49
Article65 TransitionalprovisionsregardingArticle51
Chapter2 Finalprovisions
Article66 CommissioninformationArticle67 RepealedDirectives45
Article68 Implementation45
Article69 AddresseesANNEXI Listofactivitiessubjecttomutualrecognition
ANNEXII Classificationofoff-balance-sheetitems
ANNEXIII Thetreatmentofoff-balance-sheetitemsANNEXIV Typesofoff-balance-sheetitems
ANNEXVPartA Repealed Directives, together with their successive amendments (referred
toinArticle67)
ANNEXVPartB Deadlinesforimplementation(referredtoinArticle67)
ANNEXVI Correlationtable2000L0012—EN—01.05.2004—003.001—14
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TITLEI
DEFINITIONSANDSCOPE
Article 1
Definitions
ForthepurposeofthisDirective:
1. ‘creditinstitution’shallmean:
(a) an undertaking whose business is to receive deposits or other
repayable funds fromthe public and to grant credits for itsownaccount;or
(b) anelectronicmoneyinstitutionwithinthemeaningofDirective
2000/46/ECofthe EuropeanParliament andoftheCouncil of18 September 2000 on the taking up, pursuit and prudential
supervisionofthebusinessofelectronicmoneyinstitutions(
1).
For the purposes of applying the supervision on a consolidated
basis,shallbeconsideredasacreditinstitution,acreditinstitutionaccording to the first paragraph and any private or public under-taking which corresponds to the definition in the first paragraphandwhichhasbeenauthorisedinathirdcountry.
For the purposes of applying the supervision and control of large
exposures,shallbeconsideredasacreditinstitution,acreditinsti-tution according to the first paragraph, including branches of a
creditinstitutioninthirdcountriesandanyprivateorpublicunder-
taking, including its branches, which corresponds to the definitionin the first paragraph and which has been authorised in a thirdcountry;
2. ‘authorisation’ shallmeananinstrumentissuedinanyformbythe
authorities by which the right to carry on the business of a creditinstitutionisgranted;
3. ‘branch’ shall mean a place of business which forms a legally
dependentpartofacreditinstitutionandwhichcarriesoutdirectlyall or some of the transactions inherent in the business of credit
institutions; any number of places of business set up in the same
Member State by a credit institution with headquarters in anotherMemberStateshallberegardedasasinglebranch;
4. ‘competent authorities’ shall mean the national authorities which
areempoweredbylaworregulationtosupervisecreditinstitutions;
5. ‘financialinstitution’ shallmeananundertakingotherthanacredit
institution,theprincipalactivityofwhichistoacquireholdingsortocarryononeormoreoftheactivitieslistedinpoints2to12ofAnnexI;
6. ‘home Member State’ shall mean the Member State in which a
credit institution has been authorised in accordance with Articles4to11;
7. ‘host Member State’ shall mean the Member State in which a
creditinstitutionhasabranchorinwhichitprovidesservices;
8. ‘control’ shallmeantherelationshipbetweenaparentundertaking
andasubsidiary,asdefinedinArticle1ofDirective83/349/EEC,orasimilarrelationshipbetweenanynaturalorlegalpersonandan
undertaking;
9. ‘participation for the purposes of supervision on a consolidated
basis and for the purposes of points 15 and 16 of Article34(2)’ shall mean participation within the meaning of the firstsentenceofArticle17ofDirective78/660/EEC,ortheownership,2000L0012—EN—01.05.2004—003.001—15
(1) OJL275,27.10.2000,p.39.▼M1
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▼M2
▼M2
directorindirect,of20%ormoreofthevotingrightsorcapitalof
anundertaking;
10. ‘qualifiying holding’ shall mean a direct or indirect holding in an
undertakingwhichrepresents10%ormoreofthecapitalorofthe
voting rights or which makes it possible to exercise a significant
influence over the management of the undertaking in which aholdingsubsists.
11. ‘initial capital’ shall mean capital as defined in Article 34(2)(1)
and(2);
12. ‘parentundertaking’ shallmeanaparentundertakingasdefinedin
Articles1and2ofDirective83/349/EEC.
Itshall,forthepurposesofsupervisiononaconsolidatedbasisand
control of large exposures, mean a parent undertaking within themeaning of Article 1(1) of Directive 83/349/EEC and any under-taking which, in the opinion of the competent authorities,
effectively exercises a dominant influence over another under-
taking;
13. ‘subsidiary’ shallmeanasubsidiaryundertakingasdefinedinArti-
cles1and2ofDirective83/349/EEC.
Itshall,forthepurposesofsupervisiononaconsolidatedbasisand
control of large exposures, mean a subsidiary undertaking withinthe meaning of Article 1(1) of Directive 83/349/EEC and any
undertaking over which, in the opinion of the competent authori-
ties, a parent undertaking effectively exercises a dominantinfluence.
Allsubsidiariesofsubsidiaryundertakingsshallalsobeconsidered
subsidiariesoftheundertakingthatistheiroriginalparent;
14. ‘ZoneA’ shallcomprisealltheMemberStatesandallothercoun-
tries which are full members of the Organisation for Economic
Cooperation and Development (OECD) and those countries which
haveconcludedspeciallendingarrangementswiththeInternationalMonetary Fund (IMF) associated with the Fund's general arrange-ments to borrow (GAB). Any country which reschedules itsexternal sovereign debt is,however, precluded fromZone Aforaperiodoffiveyears;
15. ‘ZoneB’ shallcompriseallcountriesnotinZoneA;16. ‘Zone A credit institutions’ shall mean all credit institutions
authorised in the Member States, in accordance with Article 4,including their branches in third countries, and all private andpublic undertakings covered by the definitions in point 1, firstsubparagraph and authorised in other Zone A countries, includingtheirbranches;
17. ‘Zone B credit institutions’ shall mean all private and public
undertakings authorised outside Zone A covered by the definitionin point 1, first subparagraph, including their branches within the
Community;
18. ‘non-banksector’ shallmean all borrowersother thancredit insti-
tutions as defined in points 16 and 17, central governments andcentral banks, regional governments and local authorities, the
European Communities, the European Investment Bank (EIB) and
multilateraldevelopmentbanksasdefinedinpoint19;
19. ‘multilateraldevelopmentbanks’ shallmeantheInternationalBank
for Reconstruction and Development, the International Finance
Corporation, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the Councilof Europe Resettlement Fund, the Nordic Investment Bank, theCaribbeanDevelopmentBank,theEuropeanBankforReconstruc-tion and Development, the European Investment Fund and the
Inter-AmericanInvestmentCorporation;
20. ‘“full-risk”,“medium-risk”,“medium/low-risk”and“low-risk”off-
balance-sheet items’ shall mean the items described in Article43(2)andlistedinAnnexII;2000L0012—EN—01.05.2004—003.001—16
▼B
▼M2
21. ‘financial holdingcompany’ shall mean afinancial institution, the
subsidiary undertakings of which are either exclusively or mainlycredit institutions or financial institutions, at least one of such
subsidiaries being a credit institution, and which is not a mixed
financial holding company within the meaning of Directive 2002/87/EC of the European Parliament and of the Council of 16December2002onthesupplementarysupervisionofcreditinstitu-tions, insurance undertakings and investment firms in a financial
conglomerate(
1);
22. ‘mixed-activityholdingcompany’ shallmeanaparentundertaking,
other thana financial holdingcompany oracredit institution oramixed financial holdingcompany withinthe meaning ofDirective2002/87/EC, the subsidiaries of which include at least one creditinstitution;
23. ‘ancillarybankingservicesundertaking’ shallmeananundertaking
the principal activity of which consists in owning or managingproperty, managing data-processing services, or any other similar
activity whichisancillary tothe principal activity ofoneormore
creditinstitutions;
24. ‘exposures’ for the purpose of applying Articles 48, 49 and
50 shallmeantheassetsandoff-balance-sheetitemsreferredtoinArticle43andinAnnexesIIandIVthereto,withoutapplicationofthe weightings or degrees of risk there provided for; the risks
referred to in Annex IV must be calculated in accordance with
one of the methods set out in Annex III, without application ofthe weightings for counterparty risk; all elements entirely coveredby own funds may, with the agreement of the competent authori-ties, be excluded fromthe definition of exposures provided thatsuchownfundsarenotincludedinthecalculationofthesolvency
ratio or of other monitoring ratios provided for in this Directive
andinotherCommunityacts;exposuresshallnotinclude:
— inthecaseofforeignexchangetransactions,exposuresincurred
in the ordinary course of settlement during the 48 hoursfollowingpayment,or
— inthecaseoftransactionsforthepurchaseorsaleofsecurities,
exposures incurred in the ordinary course of settlement duringthe five working days following payment or delivery of thesecurities,whicheveristheearlier;
25. ‘groupofconnectedclients’ shallmean:
— two or more natural or legal persons who, unless it is shown
otherwise,constituteasingleriskbecauseoneofthem,directlyorindirectly,hascontrolovertheotherorothersor
— twoormorenaturalorlegalpersonsbetweenwhomthereisno
relationshipofcontrolasdefinedinthefirstindentbutwhoaretoberegardedasconstitutingasingleriskbecausetheyaresointerconnectedthat,ifoneofthemweretoexperiencefinancial
problems, the other or all of the others would be likely to
encounterrepaymentdifficulties;
26. ‘close links’ shall mean a situation in which two or more natural
orlegalpersonsarelinkedby:
(a) participation,whichshallmeantheownership,directorbyway
ofcontrol,of20%ormoreofthevotingrightsorcapitalofanundertaking,or
(b) control, which shall mean the relationship between a parent
undertaking and a subsidiary, in all the cases referred to in
Article1(1)and(2)ofDirective83/349/EEC,orasimilarrela-tionship between any natural or legal person and anundertaking;anysubsidiaryundertakingofasubsidiaryunder-taking shall also be considered a subsidiary of the parentundertakingwhichisattheheadofthoseundertakings.2000L0012—EN—01.05.2004—003.001—17
(1) OJL35,11.2.2003.▼B
▼B
Asituation in which two or more natural or legal persons are
permanently linked to one and the same person by a controlrelationship shall also be regarded as constituting a close link
betweensuchpersons.
27. ‘recognised exchanges’ shall mean exchanges recognised by the
competentauthoritieswhich:
(i) functionregularly,
(ii) have rules, issued or approved by the appropriate authorities
ofthehomecountryoftheexchange,whichdefinethecondi-
tions for the operation of the exchange, the conditions ofaccesstotheexchange aswellastheconditionsthatmustbesatisfiedbyacontractbeforeitcaneffectivelybedealtontheexchange,
(iii) haveaclearingmechanismthatprovidesforcontractslistedin
Annex IV to be subject to daily margin requirementsproviding an appropriate protection in the opinion of thecompetentauthorities.
Article 2
Scope
1. ThisDirectiveconcernsthetakingupandpursuitofthebusiness
ofcreditinstitutions.ThisDirectiveshallapplytoallcreditinstitutions.
2. Articles 25 and 52 to 56 shall also apply to financial holding
companies and mixed-activity holding companies which have theirheadofficesintheCommunity.
Theinstitutionspermanentlyexcludedbyparagraph3,withtheexcep-
tion,however,oftheMemberStates'centralbanks,shallbetreatedasfinancialinstitutionsforthepurposesofArticles25and52to56.
3. ThisDirectiveshallnotapplyto:
— thecentralbanksofMemberStates,
— postofficegiroinstitutions,
— in Belgium, the ‘Institut de Réescompte et de Garantie/Herdiscon-
tering-enWaarborginstituut’,
— in Denmark, the ‘Dansk Eksportfinansieringsfond’, the ‘Danmarks
Skibskreditfond’,and‘DanskLandbrugsRealkreditfond’,
— in Germany, the ‘Kreditanstalt für Wiederaufbau’, undertakings
which are recognised under the ‘Wohnungsgemeinnützigkeitsge-
setz’asbodiesofStatehousingpolicyandarenotmainlyengagedinbankingtransactions,andundertakingsrecognisedunderthatlawasnon-profithousingundertakings,
— in Greece, the ‘ Ελληνική Τράπεζα Βιοµηχανικής
Αναπτύξεως,’, (Elliniki Trapeza Viomichanikis Anaptyxeos), the
‘Ταµείο Παρακαταθηκών και ∆ανείων ’ (Tamio Parakatathikon
kai Danion), andthe ‘ Ταχυδροµικό Ταµιευτήριο ’(Tachidromiko
Tamieftirio),
— inSpain,the‘InstitutodeCréditoOficial’,
— inFrance,the‘Caissedesdépôtsetconsignations’,
— inIreland,creditunionsandthefriendlysocieties,
— inItaly,the‘Cassadepositieprestiti’,
— in the Netherlands, the ‘Netherlandse Investeringsbank voor
Ontwikkelingslanden NV’, the ‘NV Noordelijke Ontwikkelings-maatschappij’, the ‘NV Industriebank Limburgs Instituut voorOntwikkelingenFinanciering’andthe‘OverijsselseOntwikkelings-maatschappijNV’,
— in Austria, undertakings recognised as housing associations in the
publicinterestandthe‘ÖsterreichischeKontrollbankAG’,
— in Portugal, ‘Caixas Económicas’ existing on 1 January 1986 with
theexceptionofthoseincorporatedaslimitedcompaniesandofthe
‘CaixaEconómicaMontepioGeral’,
— in Finland, the ‘Teollisen yhteistyön rahasto Oy/Fonden för indus-
trielltsamarbeteAB’,andthe‘KeraOy/KeraAb’,2000L0012—EN—01.05.2004—003.001—18
▼B
— inSweden,the‘SvenskaSkeppshypotekskassan’,
— in the United Kingdom, the National Savings Bank, the Common-
wealth Development Finance Company Ltd, the Agricultural
Mortgage Corporation Ltd, the Scottish Agricultural SecuritiesCorporation Ltd, the Crown Agents for overseas governments andadministrations,creditunionsandmunicipalbanks,
— inLatvia,the‘kr ājaizdevusabiedr ības’,undertakingsthatarerecog-
nised under the ‘kr ājaizdevu sabiedr ību likums’ as cooperative
undertakingsrenderingfinancialservicessolelytotheirmembers,
— in Lithuania, the ‘kredito unijos’ other than the ‘Centrin ėkredito
unija’,
— in Hungary, the ‘Magyar Fejlesztési Bank Rt.’ and the ‘Magyar
Export-ImportBankRt.’,
— in Poland, the ‘Spółdzielcze Kasy Oszcz ędnościowo - Kreditowe’
andthe‘BankGospodarstwaKrajowego’.
4. The Council, acting on a proposal from the Commission, which,
for thispurpose,shall consult the Committee referred to in Article 57(hereinafter referred to as the ‘Banking Advisory Committee’) shall
decideonanyamendmentstothelistinparagraph3.
5. CreditinstitutionssituatedinthesameMemberStateandperma-
nently affiliated, on 15 December 1977, to a central body whichsupervises them and which is established in that same Member State,may beexempted fromthe requirements ofArticles 6(1),8and59if,
nolaterthan15December1979,nationallawprovidesthat:
— the commitments of the central body and affiliated institutions are
joint and several liabilities or the commitments of its affiliated
institutionsareentirelyguaranteedbythecentralbody,
— the solvency and liquidity of the central body and of all the
affiliated institutions are monitored as a whole on the basis ofconsolidatedaccounts,
— themanagementofthecentralbodyisempoweredtoissueinstruc-
tionstothemanagementoftheaffiliatedinstitutions.
Credit institutions operating locally whichare affiliated, subsequentto
15 December 1977, to a central body within the meaning of the first
subparagraph, may benefit from the conditions laid down therein if
they constitute normal additions to the network belonging to thatcentralbody.
In the case of credit institutions other than those which are set up in
areas newly reclaim ed fromthe sea or have resulted fromscission or
mergers ofexisting institutions dependent oranswerable tothecentralbody, the Council, acting on a proposal from the Commission, whichshall for this purpose, consult the Banking Advisory Committee, maylay down additional rules for the application of the second subpara-graph including the repeal of exemptions provided for in the first
subparagraph,whereitisoftheopinionthattheaffiliationofnewinsti-
tutions benefiting fromthe arrangem ents laid down in the secondsubparagraph might have an adverse effect on competition. TheCouncilshalldecidebyaqualifiedmajority.
6. Acreditinstitutionwhich,asdefinedinthefirstsubparagraphof
paragraph 5, is affiliated to a central body in the same Member StatemayalsobeexemptedfromtheprovisionsofArticle5,andalsoArti-cles40to51,and65providedthat,withoutprejudicetotheapplicationofthoseprovisionstothecentralbody,thewholeasconstitutedbythecentral body together with its affiliated institutions is subject to the
abovementionedprovisionsaconsolidatedbasis.
Incaseofexemption,Articles13,18,19,20(1)to(6),21and22shall
applytothewholeasconstitutedbythecentralbodytogetherwithitsaffiliatedinstitutions.2000L0012—EN—01.05.2004—003.001—19
▼A1
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Article 3
Prohibition for undertakings other than credit institutions from
carrying on the business of taking deposits or other repayable
fundsfromthepublic
TheMember Statesshall prohibit personsorundertakings that are not
credit institutions fromcarrying on the business of taking deposits orotherrepayablefundsfromthepublic.ThisprohibitionshallnotapplytothetakingofdepositsorotherfundsrepayablebyaMemberStateorbyaMemberState'sregional orlocal authorities orbypublicinterna-
tionalbodiesofwhichoneormoreMemberStatesaremembersorto
cases expressly covered by national or Community legislation,provided that those activities are subject to regulations and controlsintended to protect depositors and investors and applicable to thosecases.
TITLEII
REQUIREMENTS FOR ACCESS TO THE TAKING UP AND
PURSUITOFTHEBUSINESSOFCREDITINSTITUTIONS
Article 4
Authorisation
Member States shall require credit institutions to obtain authorisation
before commencing their activities. They shall lay down the require-ments for such authorisation subject to Articles 5 to 9, and notifythemtoboththeCommissionandtheBankingAdvisoryCommittee.
Article 5
Initialcapital
1. Without prejudice to other general conditions laid down by
national law, the competent authorities shall not grant authorisationwhen the credit institution does not possess separate own funds or in
caseswhereinitialcapitalislessthanEUR5million.
Member States may decide that credit institutions which do not fulfil
the requirement of separate own funds and which were in existenceon 15 December 1979 may continue to carry on their business. They
may exempt such credit institutions from complying with the require-
mentcontainedinthefirstsubparagraphofArticle6(1).
2. The Member States shall, however, have the option of granting
authorisation to particular categories of credit institutions the initial
capital of which is less than that prescribed in paragraph 1. In suchcases:
(a) theinitialcapitalshallnotbelessthanEUR1million,
(b) theMemberStatesconcernedmustnotifytheCommissionoftheir
reasonsformakinguseoftheoptionprovidedforinthisparagraph,
(c) when the list referred to in Article 11 is published, the name of
each credit institution that does not have the minimum capitalprescribedinparagraph1shallbeannotatedtothateffect.
3. Acreditinstitution'sownfundsmaynotfallbelowtheamountof
initialcapitalrequiredbyparagraphs1and2atthetimeofitsauthor-isation.
4. TheMemberStatesmaydecide thatcreditinstitutions already in
existenceon1January1993,theownfundsofwhichdonotattainthe
levelsprescribedforinitialcapitalinparagraphs1and2,maycontinuetocarryontheiractivities. Inthatevent,theirownfundsmaynotfallbelowthehighestlevelreachedwitheffectfrom22December1989.
5. If control of a credit institution falling within the category
referred to in paragraph 4 is taken by a natural or legal person otherthan the person who controlled the institution previously, the ownfunds of that institution must attain at least the level prescribed forinitialcapitalinparagraphs1and2.2000L0012—EN—01.05.2004—003.001—20
▼B
6. In certain specific circumstances and with the consent of the
competent authorities, where there is a merger of two or more creditinstitutions falling within the category referred to in paragraph 4, the
own funds of the institution resulting from the merger may not fall
belowthetotalownfundsofthemergedinstitutionsatthetimeofthemerger,aslongastheappropriatelevelspursuanttoparagraphs1and2havenotbeenattained.
7. If,inthecasesreferredtoinparagraphs3,4and6,theownfunds
should be reduced, the competent authorities may, where the circum-stances justify it, allow an institution a limited period in which torectifyitssituationorceaseitsactivities.
Article 6
Managementbodyandplaceoftheheadofficeofcreditinstitutions
1. The competent authorities shall grant an authorisation to the
credit institution only when there are at least two persons who effec-tivelydirectthebusinessofthecreditinstitution.
Moreover, the authorities concerned shall not grant authorisation if
these persons are not of sufficiently good repute or lack sufficientexperiencetoperformsuchduties.
2. EachMemberStateshallrequirethat:
— any credit institution which is a legal person and which, under its
national law, has a registered office have its head office in the
sameMemberStateasitsregisteredoffice,
— anyothercreditinstitutionhaveitsheadofficeintheMemberState
whichissueditsauthorisationandinwhichitactuallycarriesonitsbusiness.
Article 7
Shareholdersandmembers
1. The competent authorities shall not grant authorisation for the
taking-up of the business of credit institutions before they have been
informed of the identities of the shareholders or members, whether
direct or indirect, natural or legal persons, that have qualifying hold-ings,andoftheamountsofthoseholdings.
Forthepurposeofthedefinitionofqualifyingholdinginthecontextof
thisArticle,thevotingrightsreferredtoinArticle7ofCouncilDirec-
tive88/627/EEC(
1)shallbetakenintoconsideration.
2. Thecompetentauthoritiesshallrefuseauthorisationif,takinginto
account the need to ensure the sound and prudent management of acredit institution, they are not satisfied as to the suitability of the
abovementionedshareholdersormembers.
3. Where close links exist between the credit institution and other
naturalorlegalpersons,thecompetentauthoritiesshallgrantauthorisa-tion only if those links do not prevent the effective exercise of their
supervisoryfunctions.
The competent authorities shall also refuse authorisation if the laws,
regulations or administrative provisions of a non-member countrygoverning one or more natural or legal persons with which the credit
institutionhascloselinks,ordifficultiesinvolvedintheirenforcement,
preventtheeffectiveexerciseoftheirsupervisoryfunctions.
The competent authorities shall require credit institutions to provide
them with the information they require to monitor compliance withtheconditionsreferredtointhisparagraphonacontinuousbasis.2000L0012—EN—01.05.2004—003.001—21
(1) Council Directive 88/627/EEC of12December 1988ontheinformation to
be published when a major holding in a listed company is acquired or
disposedof(OJL348,17.12.1988,p.62).
▼B
Article 8
Programme ofoperationsandstructuralorganisation
MemberStatesshallrequireapplicationsforauthorisationtobeaccom-
panied bya programme of operations setting out, inter alia, the types
ofbusinessenvisagedandthestructuralorganisationoftheinstitution.
Article 9
Economicneeds
Member States may notrequire the application forauthorisation to be
examinedintermsoftheeconomicneedsofthemarket.
Article 10
Authorisationrefusal
Reasons shall be given whenever an authorisation is refused and the
applicant shall be notified thereof within six months of receipt of theapplication or, should the latter be incomplete, within six months ofthe applicant's sending the information required for the decision. Adecision shall, in any case, be taken within 12 months of the receipt
oftheapplication.
Article 11
NotificationoftheauthorisationtotheCommission
Every authorisation shall be notified to the Commission. Each credit
institutionshallbeenteredinalistwhichtheCommissionshallpublishintheOfficialJournaloftheEuropeanCommunities andshallkeepup
todate.
Article 12
PriorconsultationwiththecompetentauthoritiesofotherMember
States
Theremustbepriorconsultation withthecompetent authorities ofthe
otherMemberStateinvolvedontheauthorisationofacreditinstitutionwhichis:
— a subsidiary of a credit institution authorised in another Member
State,or
— a subsidiary of the parent undertaking of a credit institution
authorisedinanotherMemberState,or
— controlledbythesamepersons,whethernaturalorlegal,ascontrol
acreditinstitutionauthorisedinanotherMemberState.
The competent authority of a Member State involved, responsible for
thesupervisionofinsuranceundertakingsorinvestmentfirms,shallbeconsultedpriortothegrantingofanauthorisationtoacreditinstitutionwhichis:
(a) a subsidiary of an insurance undertaking or investment firm
authorisedintheCommunity;or
(b) asubsidiaryoftheparent undertakingofaninsuranceundertaking
orinvestmentfirmauthorisedintheCommunity;or
(c) controlled by the same person, whether natural or legal, who
controlsaninsuranceundertakingorinvestment firmauthorisedintheCommunity.
The relevant competent authorities referred to in the first and second
paragraphs shall in particular consult each other when assessing the
suitability of the shareholders and the reputation and experience ofdirectors involved in the management of another entity of the samegroup. They shall informeach other of any inform ation regarding thesuitability of shareholders and the reputation and experience of direc-tors which is of relevance to the other competent authorities involved2000L0012—EN—01.05.2004—003.001—22
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for the granting of an authorisation as well as for the ongoing assess-
mentofcompliancewithoperatingconditions.
Article 13
BranchesofcreditinstitutionsauthorisedinanotherMemberStateHost Member States may not require authorisation or endowment
capital for branches of credit institutions authorised in other MemberStates. The establishment and supervision of such branches shall be
effected as prescribed in Articles 17, 20(l) to (6) and Articles 22 and
26.
Article 14
Withdrawalofauthorisation
1. Thecompetent authoritiesmaywithdrawtheauthorisation issued
toacreditinstitutiononlywheresuchaninstitution:
(a) doesnotmakeuseoftheauthorisationwithin12months,expressly
renouncestheauthorisationorhasceasedtoengageinbusinessformorethansixmonths,iftheMemberStateconcernedhasmadenoprovisionfortheauthorisationtolapseinsuchcases;
(b) hasobtainedtheauthorisationthroughfalsestatementsoranyother
irregularmeans;
(c) no longer fulfils the conditions under which authorisation was
granted;
(d) nolongerpossessessufficientownfundsorcannolongerberelied
ontofulfilitsobligationstowardsitscreditors,andinparticularno
longerprovidessecurityfortheassetsentrustedtoit;
(e) fallswithinoneoftheothercaseswherenationallawprovidesfor
withdrawalofauthorisation.
2. Reasons must be given for any withdrawal of authorisation and
thoseconcernedinformedthereof;suchwithdrawalshallbenotifiedtotheCommission.
Article 15
Name
For the purpose of exercising their activities, credit institutions may,
notwithstanding any provisions concerning the use of the words
‘bank’,‘savingsbank’orotherbankingnameswhichmayexistinthehostMemberState,usethroughouttheterritoryoftheCommunitythesamenameastheyuseintheMemberStateinwhichtheirheadofficeis situated. In the event of there being any danger of confusion, thehost Member State may, for the purposes of clarification, require that
thenamebeaccompaniedbycertainexplanatoryparticulars.
Article 16
Qualifiyingholdinginacreditinstitution
1. TheMemberStatesshallrequireanynaturalorlegalpersonwho
proposestohold,directlyorindirectly aqualifyingholdinginacreditinstitutionfirsttoinformthecompetentauthorities,tellingthemofthe
size of the intended holding. Such a person must likewise inform the
competent authorities ifheproposestoincreasehisqualifying holdingsothattheproportionofthevotingrightsorofthecapitalheldbyhimwouldreachorexceed20%,33%or50%orsothatthecreditinsti-tutionwouldbecomehissubsidiary.
Without prejudice to the provisions of paragraph 2, the competent
authorities shall have a maximum of three months from the date ofthe notification provided for in the first subparagraph to oppose suchaplanif,inviewoftheneedtoensuresoundandprudentmanagementofthecreditinstitution,theyarenotsatisfiedastothesuitabilityoftheperson referred to in the first subparagraph. If they donot oppose the2000L0012—EN—01.05.2004—003.001—23
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plan referred to in the first subparagraph, they may fix a maximum
periodforitsimplementation.
2. If the acquirer of the holdings referred to in paragraph 1 is a
credit institution, insurance undertaking or investment firm authorisedin another Member State or the parent undertaking of a credit institu-tion, insurance undertaking or investment firm authorised in anotherMember State or a natural or legal person controlling a credit institu-
tion, insurance undertaking or investment firm authorised in another
Member State, and if, as a result of that acquisition, the institution inwhich the acquirer proposes to hold a holding would become asubsidiary or subject to the control of the acquirer, the assessment ofthe acquisition must be subject to the prior consultation referred to in
Article12.
3. TheMemberStatesshallrequireanynaturalorlegalpersonwho
proposestodispose,directly orindirectly, ofaqualifyingholdinginacreditinstitution firsttoinformthecompetent authorities, telling themofthesizeofhisintendedholding.Suchapersonmustlikewiseinform
the competent authorities if he proposes to reduce his qualifying
holding so that the proportion of the voting rights or of the capitalheldbyhimwouldfallbelow20%,33%or50%orsothatthecreditinstitutionwouldceasetobehissubsidiary.
4. On becoming aware of them, credit institutions shall inform the
competent authorities of any acquisitions or disposals of holdings intheir capital that cause holdings to exceed or fall below one of thethresholdsreferredtoinparagraphs1and3.
They shall also, at least once a year, informthemof the nam es of
shareholdersandmemberspossessingqualifyingholdingsandthesizesofsuchholdingsasshown,forexample,bytheinformationreceivedattheannualgeneralmeetingsofshareholdersandmembersorasaresult
of compliance with the regulations relating to companies listed on
stockexchanges.
5. The Member States shall require that, where the influence exer-
cised by the persons referred to in paragraph 1 is likely to operate to
thedetriment oftheprudentandsoundmanagementoftheinstitution,thecompetentauthoritiesshalltakeappropriatemeasurestoputanendtothatsituation.Suchmeasuresmayconsistforexampleininjunctions,sanctionsagainstdirectorsandmanagers,orthesuspensionoftheexer-
ciseofthevotingrightsattachingtothesharesheldbytheshareholders
ormembersinquestion.
Similar measures shall apply to natural or legal persons failing to
comply with the obligation to provide prior information, as laid down
in paragraph 1. If a holding is acquired despite the opposition of thecompetentauthorities,theMemberStatesshall,regardlessofanyothersanctions to be adopted, provide either for exercise of the corre-spondingvotingrightstobesuspended,orforthenullityofvotescastorforthepossibilityoftheirannulment.
6. Forthepurposesofthedefinitionofqualifyingholdingandother
levelsofholdingsetoutinthisArticle,thevotingrightsreferredtoinArticle7ofDirective88/627/EECshallbetakenintoconsideration.
Article 17
Procedures andinternalcontrolmechanisms
Home Member State competent authorities shall require that every
credit institution have soundadministrative andaccounting proceduresandadequateinternalcontrolmechanisms.2000L0012—EN—01.05.2004—003.001—24
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TITLEIII
PROVISIONSCONCERNINGTHEFREEDOMOFESTABLISH-
MENTANDTHEFREEDOMTOPROVIDESERVICES
Article 18
Creditinstitutions
The Member States shall provide that the activities listed in Annex I
may be carried on within their territories, in accordance with Articles20(1) to (6), 21(1) and (2), and 22, either by the establishment of a
branchorbywayoftheprovisionofservices,byanycreditinstitution
authorised and supervised by the competent authorities of anotherMemberState,providedthatsuchactivities arecoveredbytheauthor-isation.
Article 19
Financialinstitutions
TheMemberStatesshallalsoprovidethattheactivitieslistedinAnnex
Imaybecarriedonwithintheirterritories,inaccordancewithArticles
20(1) to (6), 21(1) and (2), and 22, either by the establishment of abranchorbywayoftheprovisionofservices,byanyfinancialinstitu-tion fromanother Mem ber State, whether a subsidiary of a creditinstitutionorthejointly-ownedsubsidiaryoftwoormorecreditinstitu-tions,thememorandumandarticlesofassociationofwhichpermitthe
carrying onof those activities and which fulfils each of the following
conditions:
— theparentundertakingorundertakingsmustbeauthorisedascredit
institutionsintheMemberStatebythelawofwhichthesubsidiaryisgoverned,
— the activities in question must actually be carried on within the
territoryofthesameMemberState,
— theparentundertakingorundertakingsmusthold90%ormoreof
thevotingrightsattachingtosharesinthecapitalofthesubsidiary.
— the parent undertaking or undertakings must satisfy the competent
authorities regarding the prudent management of the subsidiaryand must have declared, with the consent of the relevant home
MemberStatecompetentauthorities,thattheyjointlyandseverally
guaranteethecommitmentsenteredintobythesubsidiary,
— the subsidiary must be effectively included, for the activities in
questioninparticular, intheconsolidated supervisionoftheparentundertaking, or of each of the parent undertakings, in accordance
with Articles 52 to 56, in particular for the calculation of the
solvency ratio, for the control of large exposures and for purposesofthelimitationofholdingsprovidedforinArticle51.
Compliance with these conditions must be verified by the competent
authorities of the home Member State and the latter must supply the
subsidiary with a certificate of compliance which must form part ofthenotificationreferredtoinArticles20(1)to(6),and21(1)and(2).
The competent authorities of the home Member State shall ensure the
supervision ofthe subsidiaryin accordance with Articles 5(3),16,17,
26,28,29,30,and32.
The provisions mentioned in this Article shall apply mutatis mutandis
to subsidiaries, subject to the necessary modifications. In particular,
the words ‘credit institution’ should be read as ‘financial institution
fulfillingtheconditionslaiddowninArticle19’andtheword‘author-isation’as‘memorandumandarticlesofassociation’.
ThesecondsubparagraphofArticle20(3)shallread:
‘ThehomeMemberStatecompetent authoritiesshallalsocommu-
nicate the amount of own funds of the subsidiary financialinstitutionandtheconsolidated solvencyratioofthecreditinstitu-tionwhichisitsparentundertaking’.2000L0012—EN—01.05.2004—003.001—25
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IfafinancialinstitutioneligibleunderthisArticleshouldceasetofulfil
anyoftheconditionsimposed,thehomeMemberStateshallnotifythecompetent authorities of the host Member State and the activities
carriedonbythatinstitutioninthehostMemberStatebecomesubject
tothelegislationofthehostMemberState.
Article 20
Exercise oftherightofestablishment
1. Acreditinstitutionwishingtoestablishabranchwithintheterri-
toryofanotherMemberStateshallnotifythecompetent authoritiesofitsMemberState.
2. TheMemberStateshallrequireeverycreditinstitutionwishingto
establish a branch in another Member State to provide the followinginformationwheneffectingthenotificationreferredtoinparagraph1:
(a) theMemberStatewithintheterritoryofwhichitplanstoestablish
abranch;
(b) aprogrammeofoperationssettingout, interalia,thetypesofbusi-
nessenvisagedandthestructuralorganisationofthebranch;
(c) the address in the host Member State from which documents may
beobtained;
(d) thenamesofthoseresponsibleforthemanagementofthebranch.
3. UnlessthecompetentauthoritiesofthehomeMemberStatehave
reason to doubt the adequacy of the administrative structure or thefinancial situation of the credit institution, taking into account the
activities envisaged, they shall within three months of receipt of the
information referred to in paragraph 2 communicate that informationtothecompetentauthoritiesofthehostMemberStateandshallinformtheinstitutionaccordingly.
ThehomeMemberStatecompetentauthoritiesshallalsocommunicate
the amount of own funds and the solvency ratio of the credit institu-tion.
Where the competent authorities of the home Member State refuse to
communicate theinformationreferredtoinparagraph2tothecompe-tent authorities of the host Member State, they shall give reasons fortheirrefusaltotheinstitutionconcernedwithinthreemonthsofreceipt
ofalltheinformation.Thatrefusalorfailuretoreplyshallbesubjectto
arighttoapplytothecourtsinthehomeMemberState.
4. Beforethe branchofacredit institution commences itsactivities
the competent authorities of the host Member State shall, within twomonthsofreceivingtheinformationmentionedinparagraph3,preparefor the supervision of the credit institution in accordance with Article22andifnecessaryindicatetheconditionsunderwhich,intheinterestof the general good, those activities must be carried on in the host
MemberState.
5. Onreceiptofacommunicationfromthecompetentauthoritiesof
the host Member State, or in the event of the expiry of the period
provided for in paragraph 4 without receipt of any communicationfromthelatter,thebranchmaybeestablishedandcommenceitsactiv-ities.
6. In the event ofa change in any ofthe particulars communicated
pursuant to paragraph 2(b), (c) or (d), a credit institution shall givewritten notice of the change in question to the competent authoritiesofthehomeandhostMemberStatesatleastonemonthbeforemaking
the change so as to enable the competent authorities of the home
Member State to take a decision pursuant to paragraph 3 and thecompetent authorities of the host Member State to take a decision onthechangepursuanttoparagraph4.
7. Branches which have commenced their activities, in accordance
with the provisions in force in their host Member States, before 1January1993,shallbepresumedtohavebeensubjecttotheprocedurelaid down in paragraphs 1 to 5. They shall be governed, fromthe2000L0012—EN—01.05.2004—003.001—26
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abovementioned date, by paragraph 6, and by Articles 18, 19, 22 and
29.
Article 21
Exercise ofthefreedomtoprovideservices
1. Anycreditinstitutionwishingtoexercisethefreedomtoprovide
services by carrying on its activities within the territory of anotherMember State for the first time shall notify the competent authoritiesof the home Member State, of the activities on the list in Annex Iwhichitintendstocarryon.
2. The competent authorities of the home Member State shall,
withinonemonthofreceiptofthenotificationmentionedinparagraph
1, send that notification to the competent authorities of the hostMemberState.
3. This Article shall not affect rights acquired by credit institutions
providingservicesbefore1January1993.
Article 22
PowerofthecompetentauthoritiesofthehostMember State
1. HostMemberStatesmay,forstatistical purposes,requirethatall
credit institutions having branches within their territories shall report
periodically on their activities in those host Member States to thecompetentauthoritiesofthosehostMemberStates.
IndischargingtheresponsibilitiesimposedontheminArticle27,host
Member States may require that branches of credit institutions fromother Member States provide the same information as they require
fromnationalcreditinstitutionsforthatpurpose.
2. WherethecompetentauthoritiesofahostMemberStateascertain
than an institution having a branch or providing services within itsterritory is not complying with the legal provisions adopted in thatState pursuant to the provisions of this Directive involving powers of
the host Member State's competent authorities, those authorities shall
require the institution concerned to put an end to that irregular situa-tion.
3. If the institution concerned fails to take the necessary steps, the
competent authorities of the host Member State shall inform thecompetent authorities of the home Member State accordingly. The
competent authorities of the home Member State shall, at the earliest
opportunity,takeallappropriatemeasurestoensurethattheinstitutionconcerned puts an end to that irregular situation. The nature of thosemeasures shall be communicated to the competent authorities of thehostMemberState.
4. If, despite the measures taken by the home Member State or
because such measures prove inadequate or are not available in the
MemberStateinquestion,theinstitutionpersistsinviolatingthelegalrulesreferredtoinparagraph2inforceinthehostMemberState,thelatterStatemay,afterinformingthecompetentauthoritiesofthehomeMember State, take appropriate measures to prevent or to punishfurtherirregularitiesand,insofarasisnecessary,topreventthatinsti-
tution frominitiating further transactions within its territory. The
MemberStatesshallensurethatwithintheirterritoriesitispossibletoservethelegaldocumentsnecessaryforthesemeasuresoncreditinsti-tutions.
5. The provisionsof paragraph 1 to 4 shall not affect the power of
host Member States to take appropriate measures to prevent or to
punish irregularities committed within their territories which arecontrary to the legal rules they have adopted in the interest of thegeneralgood.Thisshallincludethepossibilityofpreventingoffendinginstitutions frominitiating any further transactions within their terri-tories.2000L0012—EN—01.05.2004—003.001—27
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6. Anymeasureadoptedpursuanttoparagraph3,4and5involving
penalties or restrictions on the exercise of the freedomto provideservicesmustbeproperlyjustifiedandcommunicatedtotheinstitution
concerned.Everysuchmeasureshallbesubjecttoarightofappealto
thecourtsintheMemberStatetheauthoritiesofwhichadoptedit.
7. Before following the procedure provided for in paragraph 2, 3
and 4, the competent authorities of the host Member State may, in
emergencies, takeanyprecautionary measuresnecessarytoprotect theinterests of depositors, investors and others to whomservices areprovided. The Commission and the competent authorities of the otherMember States concerned must be informed of such measures at the
earliestopportunity.
TheCommissionmay,afterconsultingthecompetentauthoritiesofthe
Member States concerned, decide that the Member State in question
mustamendorabolishthosemeasures.
8. HostMemberStatesmayexercise thepowersconferred onthem
under this Directive by taking appropriate measures to prevent or to
punish irregularities committed within their territories. This shall
include the possibility ofpreventing institutions frominitiating furthertransactionswithintheirterritories.
9. In the event of the withdrawal of authorisation the competent
authorities of the host Member State shall be informed and shall takeappropriate measures to prevent the institution concerned from initi-ating further transactions within its territory and to safeguard theinterests of depositors. Every two years the Commission shall submitareportonsuchcasestotheBankingAdvisoryCommittee.
10. TheMemberStatesshallinformtheCommissionofthenumber
andtypeofcasesinwhichtherehasbeenarefusalpursuanttoArticle20(1)to(6)orinwhichmeasureshavebeentakeninaccordance with
paragraph 4 of this Article. Every two years the Commission shall
submitareportonsuchcasestotheBankingAdvisoryCommittee.
11. NothinginthisArticleshallpreventcreditinstitutionswithhead
officesinotherMemberStatesfromadvertising theirservicesthrough
all available means of communication in the host Member State,subjecttoanyrulesgoverningtheformandthecontentofsuchadver-tisingadoptedintheinterestofthegeneralgood.
TITLEIV
RELATIONSWITHTHIRDCOUNTRIES
Article 23
Notificationofthesubsidiariesofthirdcountries'undertakingsand
conditionsofaccesstothemarketsofthesecountries
1. Thecompetent authorities oftheMemberStatesshallinformthe
Commission:
(a) ofany authorisation ofa direct or indirect subsidiary oneor more
parent undertakings of which are governed by the laws of a thirdcountry. The Commission shall inform the Banking Advisory
Committeeaccordingly;
(b) whenever such a parent undertaking acquires a holding in a
Communitycreditinstitutionsuchthatthelatter wouldbecomeitssubsidiary. The Commission shall inform the Banking AdvisoryCommitteeaccordingly.
Whenauthorisationisgrantedtothedirectorindirectsubsidiaryofone
ormoreparentundertakingsgovernedbythelawofthirdcountries,thestructure of the group shall be specified in the notification which thecompetent authorities shall address to the Commission in accordancewithArticle11.
2. The Member States shall inform the Commission of any general
difficultiesencounteredbytheircreditinstitutionsinestablishingthem-selvesorcarryingonbankingactivitiesinathirdcountry.2000L0012—EN—01.05.2004—003.001—28
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3. The Commission shall periodically draw up a report examining
thetreatment accorded toCommunity credit institutionsinthirdcoun-tries, in the terms referred to in paragraphs 4 and 5, as regards
establishment andthecarrying-onofbankingactivities, andtheacqui-
sition of holdings in third-country credit institutions. The CommissionshallsubmitthosereportstotheCouncil,togetherwithanyappropriateproposals.
4. WheneveritappearstotheCommission,eitheronthebasisofthe
reportsreferredtoinparagraph3oronthebasisofotherinformation,
thatathirdcountryisnotgrantingCommunitycreditinstitutionseffec-tive market access comparable to that granted by the Community tocreditinstitutionsfromthatthirdcountry,theCommissionmaysubmitproposals to the Council for the appropriate mandate for negotiationwith a view to obtaining comparable competitive opportunities for
Communitycreditinstitutions.TheCouncilshalldecidebyaqualified
majority.
5. WheneveritappearstotheCommission,eitheronthebasisofthe
reports referred toinparagraph 3oronthe basisofother informationthat Community credit institutions in a third country do not receive
national treatment offering the same competitive opportunities as are
available todomesticcreditinstitutionsandtheconditionsofeffectivemarket access are not fulfilled, the Commission may initiate negotia-tionsinordertoremedythesituation.
Inthecircumstancesdescribedinthefirstsubparagraph,itmayalsobe
decidedatanytime,andinadditiontoinitiatingnegotiations,inaccor-
dancewiththeprocedurelaiddowninArticle60(2),thatthecompetent
authorities oftheMemberStatesmustlimit orsuspendtheirdecisionsregarding requests pending at the moment of the decision or futurerequestsforauthorisations andtheacquisition ofholdingsbydirect orindirect parent undertakingsgovernedbythelawsofthethirdcountryin question. The duration of the measures referred to may not exceed
threemonths.
Before the end of that three-month period, and in the light of the
results of the negotiations, the Council may, acting on a proposalfrom the Commission, decide by a qualified majority whether themeasuresshallbecontinued.
Suchlimitationsorsuspensionmaynotapplytothesettingupofsubsi-
diariesbycreditinstitutionsortheirsubsidiariesdulyauthorisedintheCommunity, or to the acquisition of holdings in Community creditinstitutionsbysuchinstitutionsorsubsidiaries.
6. WheneveritappearstotheCommissionthatoneofthesituations
described in paragraphs 4 and 5 obtains, the Member States shall
informitatitsrequest:
(a) ofanyrequestfortheauthorisationofadirectorindirectsubsidiary
oneormoreparentundertakingsofwhicharegovernedbythelawsofthethirdcountryinquestion;
(b) whenever they are informed in accordance with Article 16 that
suchanundertakingproposestoacquireaholdinginaCommunitycreditinstitutionsuchthatthelatterwouldbecomeitssubsidiary.
This obligation to provide information shall lapse whenever an agree-
ment isreached withthe third country referred toinparagraph 4or5
orwhenthemeasuresreferredtointhesecondandthirdsubparagraphs
ofparagraph5ceasetoapply.
7. MeasurestakenpursuanttothisArticlecomplywiththeCommu-
nity's obligations under any international agreements, bilateral ormultilateral, governing the taking-up and pursuit of the business ofcreditinstitutions.2000L0012—EN—01.05.2004—003.001—29
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Article 24
Branchesofcreditinstitutionshavingtheirheadofficesoutsidethe
Community
1. Member States shall not apply to branches of credit institutions
havingtheirheadofficeoutsidetheCommunity,whencommencingorcarrying ontheir business,provisions which result in more favourable
treatment than that accorded to branches of credit institutions having
theirheadofficeintheCommunity.
2. The competent authorities shall notify the Commission and the
BankingAdvisoryCommitteeofallauthorisationsforbranchesgranted
tocreditinstitutionshavingtheirheadofficeoutsidetheCommunity.
3. Without prejudice to paragraph 1, the Community may, through
agreementsconcludedinaccordancewiththeTreatywithoneormorethird countries, agree to apply provisions which, on the basis of theprinciple of reciprocity, accord to branches of a credit institution
having its head office outside the Community identical treatment
throughouttheterritoryoftheCommunity.
Article 25
Cooperation with third countries' competent authorities regarding
supervisiononaconsolidatedbasis
1. The Commission may submit proposals to the Council, either at
therequestofaMemberStateoronitsowninitiative,forthenegotia-tion of agreements with one or more third countries regarding the
meansofexercisingsupervisiononaconsolidatedbasisover:
— creditinstitutionstheparentundertakingsofwhichhavetheirhead
officessituatedinathirdcountry,and
— creditinstitutionssituatedinthirdcountriestheparentundertakings
ofwhich,whethercreditinstitutionsorfinancialholdingcompanies,havetheirheadofficesintheCommunity.
2. Theagreementsreferredtoinparagraph1shallinparticularseek
toensureboth:
— that the competent authorities of the Member States are able to
obtain the information necessary for the supervision, on the basis
of their consolidated financial situations, of credit institutions orfinancial holding companies situated in the Community and whichhave assubsidiaries credit institutions orfinancial institutions situ-ated outside the Community, or holding participation in suchinstitutions,
— that the competent authorities of third countries are able to obtain
theinformationnecessaryforthesupervisionofparentundertakingsthe head offices of which are situated within their territories andwhichhaveassubsidiariescreditinstitutionsorfinancialinstitutionssituated in one or more Member States or holding participation in
suchinstitutions.
3. The Commission and the Banking Advisory Committee shall
examine the outcome of the negotiations referred to in paragraph 1andtheresultingsituation.
TITLEV
PRINCIPLES AND TECHNICAL INSTRUMENTS FOR
PRUDENTIALSUPERVISION
CHAPTER1
PRINCIPLESOFPRUDENTIALSUPERVISION
Article 26
CompetenceofcontrolofthehomeMemberState
1. Theprudentialsupervisionofacreditinstitution,includingthatof
theactivitiesitcarriesonaccordancewithArticles18and19,shallbe2000L0012—EN—01.05.2004—003.001—30
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the responsibility of the competent authorities of the home Member
State, without prejudice to those provisions of this Directive whichgiveresponsibilitytotheauthoritiesofthehostMemberState.
2. Paragraph1shallnotpreventsupervisiononaconsolidatedbasis
pursuanttothisDirective.
Article 27
CompetenceofthehostMember State
HostMember States shall retain responsibility incooperation with the
competentauthoritiesofthehomeMemberStateforthesupervisionoftheliquidityofthebranchesofcreditinstitutionspendingfurthercoor-dination. Without prejudice to the measures necessary for the
reinforcement of the European Monetary System, host Member States
shallretaincompleteresponsibilityforthemeasuresresultingfromtheimplementation of their monetary policies. Such measures may notprovide for discriminatory or restrictive treatment based on the factthatacreditinstitutionisauthorisedinanotherMemberState.
Article 28
Collaborationconcerningsupervision
ThecompetentauthoritiesoftheMemberStatesconcernedshallcolla-
borate closely in order to supervise the activities of credit institutionsoperating,inparticularbyhavingestablishedbranchesthere,inoneor
more Member States other than that in which their head offices are
situated.Theyshallsupplyoneanotherwithallinformationconcerningthemanagementandownershipofsuchcreditinstitutionsthatislikelytofacilitatetheirsupervisionandtheexaminationoftheconditionsfortheir authorisation, and all information likely to facilitate the moni-toring of such institutions, in particular with regard to liquidity,
solvency, deposit guarantees, the limiting oflarge exposures,adminis-
trativeandaccountingproceduresandinternalcontrolmechanisms.
Article 29
On-the-spot verification of branches established in another
Member State
1. HostMemberStatesshallprovide that,whereacredit institution
authorised in another Member State carries on its activities through abranch,thecompetentauthoritiesofthehomeMemberStatemay,afterhaving first informed the competent authorities of the host Member
State, carry out themselves or through the intermediary of persons
theyappointforthatpurposeon-the-spotverificationoftheinformationreferredtoinArticle28.
2. The competent authorities of the home Member State may also,
for purposes of the verification of branches, have recourse to one of
theotherprocedureslaiddowninArticle56(7).
3. ThisArticleshallnotaffecttherightofthecompetentauthorities
ofthehostMemberStatetocarryout,inthedischargeoftheirrespon-sibilities under this Directive, on-the-spot verifications of branchesestablishedwithintheirterritory.
Article 30
Exchangeofinformationandprofessionalsecrecy
1. TheMemberStatesshallprovidethatallpersonsworkingorwho
have worked for the competent authorities, as well as auditors or
experts acting on behalf of the competent authorities, shall be bound
bytheobligationofprofessionalsecrecy.Thismeansthatnoconfiden-tial information which they may receive in the course of their dutiesmay be divulged to any person or authority whatsoever, except insummaryorcollectiveform,suchthatindividualinstitutionscannotbeidentified,withoutprejudicetocasescoveredbycriminallaw.2000L0012—EN—01.05.2004—003.001—31
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Nevertheless, where a credit institution has been declared bankrupt or
is being compulsorily wound up, confidential information which doesnotconcernthirdpartiesinvolvedinattemptstorescuethatcreditinsti-
tutionmaybedivulgedincivilorcommercialproceedings.
2. Paragraph 1 shall not prevent the competent authorities of the
various Member States from exchanging information in accordancewiththisDirectiveandwithotherDirectivesapplicable tocreditinsti-
tutions. That information shall be subject to the conditions of
professionalsecrecyindicatedinparagraph1.
3. Member States may conclude cooperation agreements, providing
for exchanges of information, with the competent authorities of thirdcountries or with authorities or bodies of third countries as defined in
paragraphs5and6onlyiftheinformationdisclosedissubjecttoguar-
anteesofprofessionalsecrecyatleastequivalenttothosereferredtointhisArticle. Suchexchange ofinformation mustbeforthe purposeofperformingthesupervisorytaskoftheauthoritiesorbodiesmentioned.
Wheretheinformation originatesinanotherMemberState,itmaynot
be disclosed without the express agreement of the competent authori-
ties which have disclosed it and, where appropriate, solely for thepurposesforwhichthoseauthoritiesgavetheiragreement.
4. Competent authorities receiving confidential information under
paragraphs1or2mayuseitonlyinthecourseoftheirduties:
— tocheckthattheconditionsgoverningthetaking-upofthebusiness
ofcreditinstitutionsaremetandtofacilitatemonitoring,onanon-consolidatedorconsolidatedbasis,oftheconductofsuchbusiness,
especiallywithregardtothemonitoringofliquidity,solvency,large
exposures, and administrative and accounting procedures andinternalcontrolmechanisms,or
— toimposesanctions,or— in an administrative appeal against a decision of the competent
authority,or
— in court proceedings initiated pursuant to Article 33 or to special
provisions provided for in this in other Directives adopted in the
fieldofcreditinstitutions.
5. Paragraphs 1 and 4 shall not preclude the exchange of informa-
tion within a Member State, where there are two or more competent
authorities in the same Member State, or between Member States,
betweencompetentauthoritiesand:
— authoritiesentrustedwiththepublicdutyofsupervisingotherfinan-
cial organisations and insurance companies and the authorities
responsibleforthesupervisionoffinancialmarkets,
— bodies involved inthe liquidation andbankruptcyofcredit institu-
tionsandinothersimilarprocedures,
— personsresponsibleforcarryingoutstatutoryauditsoftheaccounts
ofcreditinstitutionsandotherfinancialinstitutions,
in the discharge of their supervisory functions, and the disclosure to
bodies which administer deposit-guarantee schemes of informationnecessary to the exercise of their functions. The information receivedshall be subject to the conditions of professional secrecy indicated inparagraph1.
6. Notwithstandingparagraphs1to4,MemberStatesmayauthorise
exchangesofinformationbetween,thecompetentauthoritiesand:
— theauthoritiesresponsibleforoverseeingthebodies,involvedinthe
liquidation and bankruptcy of credit institutions and other similar
procedures,or
— the authorities responsible for overseeing persons charged with
carryingoutstatutoryauditsoftheaccountsofinsuranceundertak-ings, credit institutions, investment firms and other financialinstitutions.2000L0012—EN—01.05.2004—003.001—32
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Member States which have recourse to the provisions of the first
subparagraph shall require at least that the following conditions aremet:
— theinformationshallbeforthepurposeofperformingthesupervi-
sorytaskreferredtointhefirstsubparagraph,
— information received in this context shall be subject to the condi-
tionsofprofessionalsecrecyimposedinparagraph1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competentauthorities which have disclosed it and, where appropriate, solelyforthepurposesforwhichthoseauthoritiesgavetheiragreement.
MemberStatesshallcommunicate totheCommissionandtotheother
MemberStatesthenameoftheauthoritieswhichmayreceiveinforma-
tionpursuanttothisparagraph.
7. Notwithstandingparagraphs1to4,MemberStatesmay,withthe
aimof strengthening the stability, including integrity, of the financialsystem, authorise the exchange of information between the competentauthorities and the authorities or bodies responsible under law for thedetectionandinvestigationofbreachesofcompanylaw.
MemberStateswhichhaverecoursetotheprovisioninthefirstsubpar-
agraphshallrequireatleastthatthefollowingconditionsaremet:
— the information shall be for the purpose of performing the task
referredtointhefirstsubparagraph,
— information received in this context shall be subject to the condi-
tionsofprofessionalsecrecyimposedinparagraph1,
— where the information originates in another Member State, it may
not be disclosed without the express agreement of the competentauthorities which have disclosed it and, where appropriate, solelyforthepurposesforwhichthoseauthoritiesgavetheiragreement.
Where, in a Member State, the authorities or bodies referred toin the
firstsubparagraphperformtheirtaskofdetection orinvestigationwith
theaid,inviewoftheirspecificcompetence, ofpersonsappointedfor
that purpose and not employed in the public sector, the possibility ofexchanging information provided for in the first subparagraph may beextendedtosuchpersonsundertheconditionsstipulatedinthesecondsubparagraph.
Inordertoimplementthethirdindentofthesecondsubparagraph,the
authoritiesorbodiesreferredtointhefirstsubparagraphshallcommu-
nicate to the competent authorities which have disclosed theinformation, the names and precise responsibilities of the persons towhomitistobesent.
MemberStatesshallcommunicate totheCommissionandtotheother
Member States the names of the authorities or bodies which mayreceiveinformationpursuanttothisparagraph.
Before 31December 2000,theCommissionshalldrawupa report on
theapplicationoftheprovisionsofthisparagraph.
8. This Article shall not prevent a competent authority from trans-
mitting:
— to central banks and other bodies with a similar function in their
capacityasmonetaryauthorities,
— where appropriate to other public authorities responsible for over-
seeingpaymentsystems,
information intended for the performance of their task, nor shall it
prevent such authorities or bodies from communicating to the compe-
tentauthoritiessuchinformation astheymayneedforthepurposesof
paragraph4.InformationreceivedinthiscontextshallbesubjecttotheconditionsofprofessionalsecrecyimposedinthisArticle.
9. In addition, notwithstanding the provisions referred to in para-
graphs 1 and 4, the Member States may, by virtue of provisions laiddown by law, authorise the disclosure of certain information to otherdepartments of their central government administrations responsible2000L0012—EN—01.05.2004—003.001—33
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forlegislationonthesupervisionofcreditinstitutionsfinancialinstitu-
tions, investment services and insurance companies and to inspectorsactingonbehalfofthosedepartments.
However, such disclosures may be made only where necessary for
reasonsofprudentialcontrol.
However, the Member States shall provide that information received
under paragraphs 2 and 5 and that obtained by means of the on-the-spot verification referred to in Article 29(1) and (2) may never bedisclosed in the cases referred to in this paragraph except with the
expressconsentofthecompetentauthoritieswhichdisclosedtheinfor-
mation or of the competent authorities of the Member State in whichon-the-spotverificationwascarriedout.
10. This Article shall not prevent the competent authorities from
communicating the information referred to in paragraphs 1 to 4 to aclearinghouseorothersimilarbodyrecognisedundernationallawfortheprovisionofclearingorsettlementservicesforoneoftheirMemberStates'marketsiftheyconsiderthatitisnecessarytocommunicatetheinformationinordertoensuretheproperfunctioningofthosebodiesin
relation to defaults or potential defaults by market participants. The
information received in this context shall be subject to the conditionsof professional secrecy imposed in paragraph 1. The Member Statesshall, however, ensure that information received under paragraph 2maynotbedisclosedinthecircumstancesreferredtointhisparagraph
without the express consent of the competent authorities which
disclosedit.
Article 31
Duty of persons responsible for the legal control of annual and
consolidatedaccounts
1. MemberStatesshallprovideatleastthat:
(a) anypersonauthorisedwithinthemeaningofCouncilDirective84/
253/EEC(
1),performinginacreditinstitutionthetaskdescribedin
Article 51 of Council Directive 78/660/EEC(2), or Article 37 of
Council Directive 83/349/EEC, or Article 31 of Directive 85/611/
EEC(3), or any other statutory task, shall have a duty to report
promptly to the competent authorities any fact or decisionconcerning that institution of which he has become aware whilecarryingoutthattaskwhichisliableto:
— constituteamaterialbreachofthelaws,regulationsoradminis-
trative provisions which lay down the conditions governing
authorisation or which specifically govern pursuit of the activ-itiesofcreditinstitutions,or
— affectthecontinuousfunctioningofthecreditinstitution,or
— lead to refusal to certify the accounts or to the expression of
reservations;
(b) that personshall likewise have a dutytoreport anyfact anddeci-
sions of which he becomes aware in the course of carrying out atask as described in (a) in an undertaking having close linksresulting froma control relationship with the credit institution
withinwhichheiscarryingouttheabovementionedtask.2000L0012—EN—01.05.2004—003.001—34
(1) Eighth Council Directive (84/253/EEC) of 10 April 1984 based on Article
44(2)(g) of the Treaty on the approval of persons responsible for carrying
out the statutory audits of accounting documents (OJ L 126, 12.5.1984, p.
20).
(2) Fourth Council Directive (78/660/EEC) of 25 July 1978 based on Article
44(2)(g)oftheTreatyontheannualaccountsofcertaintypesofcompanies
(OJL222,14.8.1978,p.11).DirectiveaslastamendedbyDirective1999/
60/EC(OJL62,26.6.1999,p.65).
(3) CouncilDirective85/611/EECof20December1985onthecoordinationof
laws, regulations and administrative provisions relating to undertakings for
collective investment in transferable securities (UCITS) (OJ L 375,
31.12.1985, p. 3). Directive as last amended by Directive 95/26/EC (OJ L
168,18.7.1995,p.7).
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2. The disclosure in good faith to the competent authorities, by
persons authorised within the meaning of Directive 84/253/EEC, ofany fact or decision referred to in paragraph 1 shall not constitute a
breach of any restriction on disclosure of information imposed by
contract or by any legislative, regulatory or administrative provisionandshallnotinvolvesuchpersonsinliabilityofanykind.
Article 32
Power ofsanctionofthecompetentauthorities
Without prejudice to the procedures for the withdrawal of authorisa-
tions and the provisions of criminal law, the Member States shallprovide that their respective competent authorities may, as againstcreditinstitutionsorthosewhoeffectivelycontrolthebusinessofcredit
institutionswhichbreachlaws,regulationsoradministrativeprovisions
concerning the supervision or pursuit of their activities, adopt orimpose in respect of them penalties or measures aimed specifically atendingobservedbreachesorthecausesofsuchbreaches.
Article 33
Righttoapplytothecourts
Member States shall ensure that decisions taken in respect of a credit
institution in pursuance of laws, regulations and administrative provi-sions adopted in accordance with this Directive may be subject to the
righttoapplytothecourts.Thesameshallapplywherenodecisionis
taken within six months of its submission in respect of an applicationforauthorisationwhichcontainsalltheinformation requiredundertheprovisionsinforce.
Article 33a
Article3ofDirective2000/46/ECshallapplytocreditinstitutions.
CHAPTER2
TECHNICALINSTRUMENTSOFPRUDENTIALSUPERVISION
Section1
Own funds
Article 34
General principles
1. Wherever a Member State lays down by law, regulation or
administrative action a provision in implementation of Communitylegislation concerningtheprudentialsupervisionofanoperativecredit
institutionwhichusesthetermorreferstotheconceptofownfunds,it
shall bring this termor concept into line with the definition given inparagraphs2,3and4andArticles35to38.
2. Subject to the limits imposed in Article 38, the unconsolidated
ownfundsofcreditinstitutionsshallconsistofthefollowingitems:
(1) capital withinthemeaning ofArticle 22ofDirective 86/635/EEC,
in so far as it has been paid up, plus share premium accounts butexcludingcumulativepreferentialshares;
(2) reserveswithinthemeaningofArticle23ofDirective86/635/EEC
andprofitsandlossesbroughtforwardasaresultoftheapplicationofthefinalprofitorloss.TheMemberStatesmaypermitinclusion
of interimprofits before a form al decision has been taken only if
these profits have been verified by persons responsible for theauditing of the accounts and if it is proved to the satisfaction ofthe competent authorities that the amount thereof has been evalu-ated inaccordance withtheprinciples setoutinDirective 86/635/EECandisnetofanyforeseeablechargeordividend;2000L0012—EN—01.05.2004—003.001—35
▼M1
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(3) fundsforgeneralbankingriskswithinthemeaningofArticle38of
Directive86/635/EEC;
(4) revaluation reserves within the meaning ofArticle 33ofDirective
78/660/EEC;
(5) valueadjustmentswithinthemeaningofArticle37(2)ofDirective
86/635/EEC;
(6) otheritemswithinthemeaningofArticle35;(7) the commitments of the members of credit institutions set up as
cooperativesocietiesandthejointandseveralcommitmentsoftheborrowers of certain institutions organised as funds, as referred toinArticle36(1);
(8) fixed-termcum ulative preferential shares and subordinated loan
capitalasreferredtoinArticle36(3).
ThefollowingitemsshallbedeductedinaccordancewithArticle38:
(9) ownsharesatbookvalueheldbyacreditinstitution;
(10) intangible assets within the meaning of Article 4(9) (‘Assets’)of
Directive86/635/EEC;
(11) materiallossesofthecurrentfinancialyear;
(12) holdings in other credit and financial institutions amounting to
morethan10%oftheircapital;
(13) subordinatedclaimsandinstrumentsreferredtoinArticle35and
Article 36(3) which a credit institution holds in respect of credit
andfinancialinstitutionsinwhichithasholdingsexceeding10%ofthecapitalineachcase;
(14) holdingsinothercreditandfinancialinstitutionsofupto10%of
theircapital,thesubordinatedclaimsandtheinstrumentsreferredtoinArticle35andArticle36(3)whichacreditinstitutionholdsin respect of credit and financial institutions other than those
referredtoinpoints12and13ofthissubparagraphinrespectof
theamountofthetotalofsuchholdings,subordinatedclaimsandinstruments which exceed 10 % of that credit institution's ownfundscalculated beforethededuction ofitemsinpoints12to16ofthissubparagraph;
(15) participations within the meaning of Article 1(9) which a credit
institutionholdsin
— insurance undertakings within the meaning of Article 6 of
Directive 73/239/EEC, Article 6 of Directive 79/267/EEC or
Article1(b)ofDirective98/78/ECoftheEuropeanParliamentandoftheCouncil(
1),
— reinsuranceundertakingswithinthemeaningofArticle1(c)of
Directive98/78/EC,
— insurance holding companies within the meaning of Article
1(i)ofDirective98/78/EC;
(16) each of the following items which the credit institution holds in
respect of the entities defined in point (15) in which it holds aparticipation:
— instruments referred to in Article 16(3) of Directive 73/239/
EEC,
— instruments referred to in Article 18(3) of Directive 79/267/
EEC.
Where shares in another credit institution, financial institution, insur-
ance or reinsurance undertaking or insurance holding company areheld temporarily for the purposes of a financial assistance operationdesigned to reorganise and save that entity, the competent authoritymaywaivetheprovisionsondeductionreferredtoinpoints12to16.2000L0012—EN—01.05.2004—003.001—36
(1) OJL330,5.12.1998,p.1.▼M2
▼M2
Asanalternativetothedeductionoftheitemsreferredtoinpoints15
and 16, Member States may allow their credit institutions to applymutatis mutandis methods1,2,or3ofAnnexItoDirective 2002/87/
EC. Method 1 (Accounting consolidation) shall only be applied if the
competent authorityisconfidentaboutthelevelofintegrated manage-ment and internal control regarding the entities which would beincluded in the scope of consolidation. The method chosen shall beappliedinaconsistentmannerovertime.
MemberStatesmayprovidethatforthecalculationofownfundsona
stand-alonebasis,creditinstitutionssubjecttosupervisiononaconso-lidated basis in accordance with Chapter 3 or to supplementary
supervisioninaccordance withDirective2002/87/EC,neednotdeduct
theitemsreferredtoinpoints12to16whichareheldincreditinstitu-tions, financial institutions, insurance or reinsurance undertakings orinsurance holding companies, which are included in the scope ofconsolidatedorsupplementarysupervision.
This provision shall apply to all the prudential rules harmonised by
Communityacts.
3. Theconceptofownfundsasdefinedinpoints(1)to(8)ofpara-
graph2embodiesamaximum numberofitemsandamounts.Theuseof those items and the fixing of lower ceilings, and the deduction ofitems other thanthoselisted inpoints(9)to(13)ofparagraph 2shall
be left to the discretion of the Member States. Member States shall
neverthelessbeobligedtoconsiderincreasedconvergencewithaviewtoacommondefinitionofownfunds.
To that end, the Commission shall, by 1 January 1996 at the latest,
submit a report to the European Parliament and to the Council ontheapplication of this Article and Articles 35 to 39, accompanied, whereappropriate, by such proposals for amendment as it shall deem neces-sary. Not later than 1 January 1998, the European Parliament and theCouncil shall, acting in accordance with the procedure laid down in
Article 251 of the Treaty and after consultation of the Economic and
Social Committee, examine the definition of own funds with a viewtotheuniformapplicationofthecommondefinition.
4. Theitemslistedinpoints(1)to(5)ofparagraph2mustbeavail-
abletoacreditinstitution forunrestricted andimmediate usetocoverrisksorlossesassoonastheseoccur.Theamountmustbenetofanyforeseeable tax charge at the moment of its calculation or be suitablyadjusted in so far as such tax charges reduce the amount up to which
theseitemsmaybeappliedtocoverrisksorlosses.
Article 35
Otheritems
1. The concept of ownfundsusedbya Member State may include
other items provided that, whatever their legal or accounting designa-tionsmightbe,theyhavethefollowingcharacteristics:
(a) they are freely available to the credit institution to cover normal
banking risks where revenue or capital losses have not yet beenidentified;
(b) theirexistenceisdisclosedininternalaccountingrecords;
(c) theiramountisdeterminedbythemanagementofthecreditinstitu-
tion, verified by independent auditors, made known to thecompetentauthoritiesandplacedunderthesupervisionofthelatter.
2. Securities of indeterminate duration and other instruments that
fulfilthefollowingconditionsmayalsobeacceptedasotheritems:
(a) theymaynotbereimbursedonthebearer'sinitiativeorwithoutthe
prioragreementofthecompetentauthority;
(b) the debt agreement must provide for the credit institution to have
theoptionofdeferringthepaymentofinterestonthedebt;2000L0012—EN—01.05.2004—003.001—37
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(c) thelender'sclaimsonthecreditinstitutionmustbewhollysubordi-
natedtothoseofallnon-subordinatedcreditors;
(d) the documents governing the issue of the securities must provide
for debt and unpaid interest to be such as to absorb losses, whilstleavingthecreditinstitutioninapositiontocontinuetrading;
(e) onlyfullypaid-upamountsshallbetakenintoaccount.
Tothesemaybeaddedcumulativepreferentialsharesotherthanthose
referredtoinpoint8ofArticle34(2).
Article 36
Otherprovisionsconcerningownfunds
1. Thecommitments ofthemembers ofcreditinstitutions setupas
cooperative societies referred to in point 7 of Article 34(2), shallcomprise those societies' uncalled capital; together with the legal
commitments of the members of those cooperative societies to make
additional non-refundable payments should the credit institution incura loss, in which case it must be possible to demand those paymentswithoutdelay.
The joint and several commitments of borrowers in the case of credit
institutions organisedasfundsshallbetreated inthesamewayasthe
precedingitems.
All such items may be included in own funds in so far as they are
countedastheownfundsofinstitutionsofthiscategoryundernationallaw.
2. MemberStatesshallnotincludeintheownfundsofpubliccredit
institutions guarantees which they or their local authorities extend to
suchentities.
3. Member States or the competent authorities may include fixed-
termcum ulative preferential shares referred to in point (8) of Article34(2) and subordinated loan capital referred to in that provision inown funds, if binding agreements exist under which, in the event ofthe bankruptcy or liquidation of the credit institution, they rank after
theclaimsofallothercreditorsandarenottoberepaiduntilallother
debtsoutstandingatthetimehavebeensettled.
Subordinatedloancapitalmustalsofulfilthefollowingcriteria:
(a) onlyfullypaid-upfundsmaybetakenintoaccount;
(b) the loans involved must have an original maturity of at least five
years, after which they may be repaid; if the maturity of the debt
is not fixed, they shall be repayable only subject to five years'notice unless the loans are no longer considered as own funds orunlessthepriorconsentofthecompetentauthoritiesisspecificallyrequiredforearlyrepayment.Thecompetent authoritiesmaygrantpermission for the early repayment of such loans provided the
request is made at the initiative of the issuer and the solvency of
thecreditinstitutioninquestionisnotaffected;
(c) theextenttowhichtheymayrankasownfundsmustbegradually
reduced during at least the last five years before the repayment
date;
(d) the loan agreement must not include any clause providing that in
specified circumstances, other than the winding-up of the credit
institution,thedebtwillbecomerepayablebeforetheagreedrepay-
mentdate.
Article 37
Calculationofownfundsonaconsolidatedbasis
1. Where thecalculation istobemade ona consolidated basis,the
consolidated amounts relating to the items listed under Article 34(2)shallbeusedinaccordance withtheruleslaiddowninArticles 52to56. Moreover, the following may, when they are credit (‘negative’)2000L0012—EN—01.05.2004—003.001—38
▼B
items, be regarded as consolidated reserves for the calculation of own
funds:
— anyminorityinterestswithinthemeaningofArticle21ofDirective
83/349/EEC,wheretheglobalintegrationmethodisused,
— thefirstconsolidationdifferencewithinthemeaningofArticles19,
30and31ofDirective83/349/EEC,
— the translation differences included in consolidated reserves in
accordancewithArticle39(6)ofDirective86/635/EEC,
— any difference resulting fromthe inclusion of certain participating
interestsinaccordance withthemethodprescribedinArticle33ofDirective83/349/EEC.
2. Where the above are debit (‘positive’) items, they must be
deductedinthecalculationofconsolidatedownfunds.
Article 38
Deductionsandlimits
1. Theitemsreferredtoinpoints(4)to(8)ofArticle34(2),shallbe
subjecttothefollowinglimits:
(a) the total of the items in points (4) to (8) may not exceed a
maximum of 100 % of the items in points (1) plus (2) and (3)minus(9),(10)and(11);
(b) the total of the items in points (7) and (8) may not exceed a
maximumof50%oftheitemsinpoints(1)plus(2)and(3)minus(9),(10)and(11);
(c) thetotaloftheitemsinpoints(12)and(13)shallbedeductedfrom
thetotaloftheitems.
2. The competent authorities may authorise credit institutions to
exceedthelimitlaiddowninparagraph1intemporaryandexceptionalcircumstances.
Article 39
Provisionofprooftothecompetentauthorities
CompliancewiththeconditionslaiddowninArticle34(2),(3)and(4)
andArticles35to38mustbeprovedtothesatisfactionofthecompe-tentauthorities.
Section2
Solvency ratio
Article 40
General principles
1. Thesolvencyratioexpressesownfunds,asdefinedinArticle41,
asaproportionoftotalassetsandoff-balance-sheetitems,risk-adjusted
inaccordancewithArticle42.
2. Thesolvencyratiosofcreditinstitutionswhichareneitherparent
undertakings as defined in Article 1 of Directive 83/349/EEC, norsubsidiaries of such undertakings shall be calculated on an individualbasis.
3. Thesolvencyratiosofcreditinstitutionswhichareparentunder-
takings shall be calculated on a consolidatedbasis in accordance withthemethodslaiddowninthisDirectiveandinDirective86/635/EEC.
4. The competent authorities responsible for authorising and super-
vising a parent undertaking which is a credit institution may also
require the calculation of a subconsolidated or unconsolidated ratio inrespect ofthat parent undertaking andofanyofitssubsidiaries whicharesubjecttoauthorisationandsupervisionbythem.Wheresuchmoni-toringofthesatisfactoryallocationofcapitalwithinabankinggroupisnotcarriedout,othermeasuresmustbetakentoattainthatend.2000L0012—EN—01.05.2004—003.001—39
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5. Without prejudice to credit institutions' compliance with the
requirements of paragraphs 2, 3 and 4, and of Article 52(8) and (9),the competent authorities shall ensure that ratios are calculated not
less than twice each year, either by credit institutions themselves,
whichshallcommunicate theresultsandanycomponentdatarequiredtothecompetentauthorities,orbythecompetentauthorities,usingdatasuppliedbythecreditinstitutions.
6. The valuation of assets and off-balance-sheet items shall be
effectedinaccordancewithDirective86/635/EEC.
Article 41
Thenumerator:ownfunds
OwnfundsasdefinedinthisDirectiveshallformthenumeratorofthe
solvencyratio.
Article 42
Thedenominator:risk-adjustedassetsandoff-balance-sheetitems
1. Degrees of credit risk, expressed as percentage weightings, shall
be assigned toasset items inaccordance withArticles 43and44,andexceptionally Articles 45, 62and 63. The balance-sheet value of each
asset shall then be multiplied by the relevant weighting to produce a
risk-adjustedvalue.
2. In the case of the off-balance-sheet items listed in Annex II, a
two-stagecalculationasprescribedinArticle43(2)shallbeused.
3. In the case of the off-balance-sheet items referred to in Article
43(3),thepotentialcostsofreplacingcontractsintheeventofcounter-
party default shall be calculated by means of one of the two methodsset out in Annex III. Those costs shall be multiplied by the relevantcounterpartyweightingsinArticle43(1),exceptthe100%weightingsasprovidedforthereshallbereplacedby50%weightingstoproduce
risk-adjustedvalues.
4. Thetotaloftherisk-adjustedvaluesoftheassetsandoff-balance-
sheetitemsmentioned inparagraphs2and3shallbethedenominatorofthesolvencyratio.
Article 43
Riskweightings
1. The following weightings shall be applied to the various cate-
gories of asset items, although the competent authorities may fixhigherweightingsastheyseefit:
(a) Zeroweighting
(1) cashinhandandequivalentitems;
(2) assetitemsconstitutingclaimsonZoneAcentralgovernments
andcentralbanks;
(3) assetitemsconstitutingclaimsontheEuropeanCommunities;(4) asset items constituting claims carrying the explicit guarantees
of Zone A central governments and central banks or of theEuropeanCommunities;
(5) assetitemsconstitutingclaimsonZoneBcentral governments
and central banks denominated and funded in the nationalcurrenciesoftheborrowers;
(6) asset items constituting claims carrying the explicit guarantees
ofZoneBcentralgovernmentsandcentralbanksdenominatedand funded in the national currency common to the guarantorandtheborrower;
(7) assetitemssecuredtothesatisfactionofthecompetentauthori-
ties,bycollateralintheformofZoneAcentralgovernmentorcentral bank securities or securities issued by the EuropeanCommunitiesorbycashdepositsplacedwiththelendinginsti-2000L0012—EN—01.05.2004—003.001—40
▼B
tutionorbycertificatesofdepositorsimilarinstrumentsissued
byandlodgedwiththelatter;
(b) 20%weighting
(1) assetitemsconstitutingclaimsontheEIB;
(2) asset items constituting claims on multilateral development
banks;
(3) assetitemsconstituting claimscarrying theexplicit guarantee
oftheEIB;
(4) assetitemsconstitutingclaimscarryingtheexplicitguarantees
ofmultilateraldevelopmentbanks;
(5) asset items constituting claims on Zone A regional govern-
mentsorlocalauthorities,subjecttoArticle44;
(6) assetitemsconstitutingclaimscarryingtheexplicitguarantees
of Zone A regional governments or local authorities, subjecttoArticle44;
(7) asset items constituting claims on Zone A credit institutions
butnotconstitutingsuchinstitutions'ownfunds;
(8) assetitemsconstitutingclaimswithamaturityofoneyearor
less,onZoneBcreditinstitutions,otherthansecuritiesissuedby such institutions which are recognised as components oftheirownfunds;
(9) asset items carrying the explicit guarantees of Zone A credit
institutions;
(10) assetitemsconstitutingclaimswithamaturityofoneyearor
less carrying the explicit guarantees of Zone B credit institu-tions;
(11) assetitemssecured,tothesatisfactionofthecompetentautho-
rities,bycollateralintheformofsecuritiesissuedbytheEIBorbymultilateraldevelopmentbanks;
(12) cashitemsintheprocessofcollection;
(c) 50%weighting
(1) loans fully and completely secured, to the satisfaction of the
competent authorities, by mortgages on residential propertywhichisorwillbeoccupied orletbytheborrower,andloans
fullyandcompletely secured,tothesatisfaction ofthecompe-
tent authorities, by shares in Finnish residential housingcompanies, operating in accordance with the Finnish HousingCompany Act of 1991 or subsequent equivalent legislation, inrespect of residential property which is or will be occupied orletbytheborrower;
‘mortgage-backed securities’ which may be treated as loans
referred to in the first subparagraph or in Article 62(1), if the
competent authorities consider, having regard to the legal
frameworkinforceineachMemberState,thattheyareequiva-lent in the light of the credit risk. Without prejudice to thetypes of securities which may be included in and are capableof fulfilling the conditions in this point 1, ‘mortgage-backedsecurities’ may include instruments within the meaning of
Section B(1)(a) and(b)oftheAnnextoCouncil Directive 93/
22/EEC(
1). The competent authorities must in particular be
satisfiedthat:
(i) such securities are fully and directly backed by a pool of
mortgages which are of the same nature as those definedin the first subparagraph or in Article 62(1) and are fullyperforming when the mortgage-backed securities arecreated;2000L0012—EN—01.05.2004—003.001—41
(1) CouncilDirective93/22/EECof10May1993oninvestmentservicesinthe
securities field (OJ L 141, 11.6.1993, p. 27). Directive as last amended by
Directive97/9/EC(OJL84,26.3.1997,p.22).
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(ii) anacceptable high-priority charge ontheunderlyingmort-
gage-asset items is held either directly by investors inmortgage-backed securities or on their behalf by a trustee
or mandated representative in the same proportion to the
securitieswhichtheyhold;
(2) prepayments and accrued income: these assets shall be subject
to the weighting corresponding to the counterparty where acredit institution is able to determine it in accordance withDirective 86/635/EEC. Otherwise, where it is unable to deter-mine the counterparty, it shall apply a flat-rate weighting of
50%;
(d) 100%weighting
(1) assetitemsconstitutingclaimsonZoneBcentral governments
andcentralbanksexceptwheredenominatedandfundedinthenationalcurrencyoftheborrower;
(2) assetitemsconstitutingclaimsonZoneBregionalgovernments
orlocalauthorities;
(3) asset items constituting claims with a maturity of more than
oneyearonZoneBcreditinstitutions;
(4) assetitemsconstitutingclaimsontheZoneAandZoneBnon-
banksectors;
(5) tangible‘Assets’withinthemeaningofArticle4(10)ofDirec-
tive86/635/EEC;
(6) holdings of shares, participation and other components of the
own funds of other credit institutions which are not deductedfromtheownfundsofthelendinginstitutions;
(7) allotherassetsexceptwheredeductedfromownfunds.
2. The following treatment shall apply to off-balance-sheet items
other than those covered in paragraph 3. They shall first be grouped
according to the risk groupings set out in Annex II. The full value ofthefull-riskitemsshallbetakenintoaccount,50%ofthevalueofthemedium-risk items and 20% of the medium/low-risk items, while thevalueoflow-riskitemsshallbesetatzero.Thesecondstageshallbe
to multiply the off-balance-sheet values, adjusted as described above,
by the weightings attributable to the relevant counterparties in accor-dance with the treatment of asset items prescribed in paragraph 1 andArticle 44. In the case of asset sale and repurchase agreements andoutright forward purchases, the weightings shall be those attaching totheassetsinquestionandnottothecounterparties tothetransactions.
The portion of unpaid capital subscribed to the European Investment
Fundmaybeweightedat20%.
3. The methods set out in Annex III shall be applied to the off-
balance-sheetitemslistedinAnnexIVexceptfor:
— contractstradedonrecognisedexchanges,
— foreign-exchange contracts (except contracts concerning gold)with
anoriginalmaturityof14calendardaysorless.
Until 31 December 2006, the competent authorities of Member States
may exempt from the application of the methods set out in Annex III
over-the-counter(OTC)contractsclearedbyaclearinghousewherethelatter actsasthelegal counterparty andallparticipants fullycollatera-lise on a daily basis the exposure they present to the clearing house,thereby providing a protection covering both the current exposure andthepotentialfutureexposure.Thecompetent authoritiesmustbesatis-
fied that the posted collateral gives the same level of protection as
collateral whichcomplieswithparagraph1(a)(7)andthattheriskofabuild-upoftheclearing house'sexposuresbeyondthemarket valueofposted collateral is eliminated. Member States shall inform theCommissionoftheusetheymakeofthisoption.
4. Where off-balance-sheet items carry explicit guarantees, they
shall be weighted as if they had been incurred on behalf of the guar-antor rather than the counterparty. Where the potential exposurearising fromoff-balance-sheet transactions is fully and com pletely2000L0012—EN—01.05.2004—003.001—42
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secured,tothesatisfaction ofthe competent authorities, byanyofthe
asset items recognised as collateral in paragraph 1(a)(7) and (b)(11),weightings of 0%or 20% shall apply depending onthe collateral in
question.
The Member States may apply a 50 % weighting to off-balance-sheet
items which are sureties or guarantees having the character of creditsubstitutes and which are fully guaranteed, to the satisfaction of thecompetent authorities, by mortgages meeting the conditions set out inparagraph 1(c)(1), subject to the guarantor having a direct right to
suchcollateral.
5. Where asset and off-balance-sheet items are given a lower
weighting because of the existence of explicit guarantees or collateralacceptabletothecompetentauthorities,thelowerweightingshallapplyonlytothat partwhichisguaranteed orwhichisfullycovered bythecollateral.
Article 44
Weighting of claims for regional governments or local authorities
oftheMember States
1. NotwithstandingtherequirementsofArticle43(1)(b),theMember
Statesmayfixaweightingof0%fortheirownregionalgovernmentsandlocalauthoritiesifthereisnodifferenceinriskbetweenclaimsonthe latter and claims on their central governments because of therevenue-raising powersofthe regional governments andlocal authori-
ties and the existence of specific institutional arrangements the effect
of which is to reduce the chances of default by the latter. A zero-weightingfixedinaccordance withthesecriteria shallapplytoclaimson and off-balance-sheet items incurred on behalf of the regionalgovernments and local authorities in question and claims on othersandoff-balance-sheetitemsincurredonbehalfofothersandguaranteed
by those regional governments and local authorities or secured, to the
satisfactionofthecompetentauthoritiesconcerned,bycollateralintheformofsecuritiesissuedbythoseregionalgovernmentsorlocalautho-rities.
2. TheMemberStatesshallnotifytheCommissioniftheybelievea
zero-weighting to be justified according to the criteria laid down in
paragraph 1. The Commission shall circulate that information. Other
Member States may offer the credit institutions under the supervisionof their competent authorities the possibility of applying a zero-weighting where they undertake business with the regional govern-ments or local authorities in question or where they hold claims
guaranteedbythelatter,includingcollateralintheformofsecurities.
Article 45
Otherweighting
1. Withoutprejudice toArticle 44(1)theMemberStatesmayapply
a weighting of20%toassetitems whicharesecured, tothe satisfac-tionofthecompetentauthoritiesconcerned,bycollateralintheformofsecurities issued byZone Aregional governments or local authorities,by deposits placed with Zone A credit institutions other than the
lending institution, or by certificates of deposit or similar instruments
issuedbysuchcreditinstitutions.
2. TheMemberStatesmayapplyaweightingof10%toclaimson
institutions specialising in the inter-bank and public-debt markets intheir home Member States and subject to close supervision by thecompetentauthoritieswherethoseassetitemsarefullyandcompletelysecured, to the satisfaction of the competent authorities of the home
Member States, by a combination of asset items mentioned in Article
43(1)(a)and(b)recognisedbythelatterasconstitutingadequatecollat-eral.
3. The Member States shall notify the Commission of any provi-
sions adopted pursuant to paragraphs 1 and 2 and of the grounds forsuch provisions. The Commission shall forward that information to2000L0012—EN—01.05.2004—003.001—43
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the Member States. The Commission shall periodically examine the
implications of those provisions in order to ensure that they do notresultinanydistortionsofcompetition.
Article 46
Administrativebodiesandnon-commercial undertakings
For the purposes of Article 43 (1)(b), the competent authorities may
include within the concept of regional governments and local authori-
ties non-commercial administrative bodies responsible to regionalgovernments or local authorities or authorities which, in the view ofthecompetentauthorities,exercisethesameresponsibilitiesasregionalandlocalauthorities.
The competent authorities may also include within the concept of
regional governments and local authorities, churches and religious
communities constituted in the form of a legal person under publiclaw,insofarastheyraisetaxesinaccordancewithlegislationconfer-ringonthemtherighttodoso.However,inthiscasetheoptionsetoutinArticle44shallnotapply.
Article 47
Solvencyratio level
1. Credit institutions shall be required permanently to maintain the
ratiodefinedinArticle40atalevelofatleast8%.
2. Notwithstanding paragraph 1, the competent authorities may
prescribehigherminimumratiosastheyconsiderappropriate.
3. Iftheratiofallsbelow8%thecompetentauthoritiesshallensure
that the credit institution in question takes appropriate measures torestoretheratiototheagreedminimumasquicklyaspossible.
Section3
Large exposures
Article 48
Reportingoflarge exposures
1. A credit institution's exposure to a client or group of connected
clientsshallbeconsideredalargeexposurewhereitsvalueisequaltoorexceeds10%ofitsownfunds.
2. A credit institution shall report every large exposure within the
meaning of paragraph 1 to the competent authorities. Member Statesshall provide that reporting is to be carried out, at their discretion, in
accordancewithoneofthefollowingtwomethods:
— reportingofalllargeexposuresatleastonceayear,combinedwith
reporting during the year of all new large exposures and anyincreases in existing large exposures of at least 20 % with respect
tothepreviouscommunication,
— reportingofalllargeexposuresatleastfourtimesayear.
3. Exposures exempted under Article 49(7)(a), (b), (c), (d), (f), (g)
and (h) need not, however, be reported as laid down in paragraph 2.
The reporting frequency laid down in the second indent to paragraph2 may be reduced to twice a year for the exposures referred to inArticle49(7)(e)and(i),andalsoinparagraphs8,9and10.
4. The competent authorities shall require that every credit institu-
tion have sound administrative and accounting procedures and
adequate internal control mechanisms for the purpose of identifying
and recording all large exposures and subsequent changes to them, asdefinedandrequiredbythisDirective,andforthatofmonitoringthoseexposuresinthelightofeachcreditinstitution'sownexposurepolicies.
Whereacreditinstitutioninvokesparagraph3,itshallkeeparecordof
thegroundsadvancedforatleastoneyearaftertheeventgivingriseto2000L0012—EN—01.05.2004—003.001—44
▼B
the dispensation, so that the competent authorities may establish
whetheritisjustified.
Article 49
Limitsonlarge exposures
1. Acreditinstitutionmaynotincuranexposuretoaclientorgroup
ofconnectedclientsthevalueofwhichexceed25%ofitsownfunds.
2. Where that client or group of connected clients is the parent
undertaking or subsidiary of the credit institution and/or one or more
subsidiaries of that parent undertaking, the percentage laid down in
paragraph 1 shall be reduced to 20 %. Member States may, however,exempt the exposures incurred to such clients from the 20 % limit ifthey provide for specific monitoring of such exposures by othermeasures or procedures. They shall inform the Commission and theBanking Advisory Committee of the content of such measures or
procedures.
3. Acredit institution may not incur large exposures which in total
exceed800%ofitsownfunds.
4. Member Statesmay imposelimits more stringent than thoselaid
downinparagraphs1,2and3.
5. A credit institution shall at all times comply with the limits laid
down in paragraphs 1, 2 and 3 in respect of its exposures. If in an
exceptional case exposures exceed those limits, that fact must be
reported withoutdelay tothecompetent authorities whichmay, wherethe circumstances warrant it, allow the credit institution a limitedperiodoftimeinwhichtocomplywiththelimits.
6. MemberStatesmayfullyorpartiallyexemptfromtheapplication
ofparagraphs1,2and3exposuresincurredbyacreditinstitutiontoitsparent undertaking, to other subsidiaries of that parent undertaking ortoitsownsubsidiaries, insofar asthoseundertakings are covered by
the supervision on a consolidated basis to which the credit institution
itself is subject, in accordance with this Directive or with equivalentstandardsinforceinathirdcountry.
7. MemberStatesmayfullyorpartiallyexemptthefollowingexpo-
suresfromtheapplicationofparagraphs1,2and3:
(a) assetitems constituting claims onZoneAcentral governments or
centralbanks;
(b) assetitemsconstitutingclaimsontheEuropeanCommunities;
(c) asset items constituting claims carrying the explicit guarantees of
Zone A central governments or central banks or of the EuropeanCommunities;
(d) other exposures attributable to, or guaranteed by, Zone A central
governmentsorcentralbanksortheEuropeanCommunities;
(e) asset items constituting claims on and other exposures to Zone B
central governments orcentral bankswhichare denominated and,where applicable, funded in the national currencies of theborrowers;
(f) asset items and other exposuressecured, tothe satisfaction ofthe
competent authorities, bycollateral intheformofZoneAcentral
government or central bank securities, or securities issued by theEuropean Communities or by Member State regional or localauthorities for which Article 44 lays down a zero weighting forsolvencypurposes;
(g) asset items and other exposuressecured, tothe satisfaction ofthe
competent authorities, by collateral in the form of cash deposits
placed with the lending institution or with a credit institutionwhich is the parent undertaking or a subsidiary of the lendinginstitution;
(h) asset items and other exposuressecured, tothe satisfaction ofthe
competent authorities, by collateral in the form of certificates of2000L0012—EN—01.05.2004—003.001—45
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deposit issued by the lending institution or by a credit institution
which is the parent undertaking or a subsidiary of the lendinginstitutionandlodgedwitheitherofthem;
(i) asset items constituting claims on and other exposures to credit
institutions, with a maturity of one year or less, but not consti-
tutingsuchinstitutions'ownfunds;
(j) asset items constituting claims on and other exposures to those
institutions which are not credit institutions but which fulfil theconditions referred to in Article 45(2), with a maturity of oneyearorless,andsecuredinaccordancewiththesameparagraph;
(k) billsoftradeandothersimilarbills,withamaturityofoneyearor
less,bearingthesignaturesofothercreditinstitutions;
(l) debt securities as defined in Article 22(4) of Directive 85/611/
EEC;
(m) pendingsubsequentcoordination,holdingsintheinsurancecompa-
nies referred to in Article 51(3) up to 40 % of the own funds of
thecreditinstitutionacquiringsuchaholding;
(n) assetitemsconstitutingclaimsonregionalorcentralcreditinstitu-
tionswithwhichthelendinginstitutionisassociatedinanetwork
in accordance with legal or statutory provisions and which areresponsible, under those provisions, for cash-clearing operationswithinthenetwork;
(o) exposuressecured,tothesatisfactionofthecompetentauthorities,
bycollateral inthe formof securities other than those referred toin (f) provided that those securities are not issued by the credit
institution itself, its parent company or one of their subsidiaries,
or by the client or group of connected clients in question. Thesecurities used as collateral must be valued at market price, haveavaluethatexceedstheexposuresguaranteedandbeeithertradedonastockexchangeoreffectivelynegotiableandregularlyquoted
onamarketoperatedundertheauspicesofrecognisedprofessional
operatorsandallowing,tothesatisfactionofthecompetentautho-ritiesoftheMemberStateoforiginofthecreditinstitution,fortheestablishment of an objective price such that the excess value ofthe securities may be verified at any time. The excess valuerequired shall be 100 % it shall, however, be 150 % in the case
ofsharesand50%inthecaseofdebtsecurities issuedbycredit
institutions, Member State regional or local authorities other thanthose referred to in Article 44, and in the case of debt securitiesissued by the EIB and multilateral development banks. Securitiesusedascollateralmaynotconstitutecreditinstitutions'ownfunds;
(p) loans secured, to the satisfaction of the competent authorities, by
mortgagesonresidential propertyorbysharesinFinnishresiden-
tial housing companies, operating in accordance with the Finnish
Housing Company Act of 1991 or subsequent equivalent legisla-tion and leasing transactions under which the lessor retains fullownership of the residential property leased for as long as thelessee hasnotexercised hisoption topurchase, in all cases upto50%ofthevalueoftheresidentialpropertyconcerned.Thevalue
of the property shall be calculated, to the satisfaction of the
competent authorities, on the basis of strict valuation standardslaid down by law, regulation or administrative provisions. Valua-tion shall be carried out at least once a year. For the purposesofthis point residential property shall mean a residence to be occu-
piedorletbytheborrower;
(q) 50%ofthemedium/low-riskoff-balance-sheetitemsreferredtoin
AnnexII;
(r) subject to the competent authorities' agreement, guarantees other
than loan guarantees which have a legal or regulatory basis and
aregivenfortheirmembersbymutualguaranteeschemesposses-singthestatusofcreditinstitutions,subjecttoaweightingof20%oftheiramount.
MemberStatesshallinformtheCommissionoftheusetheymake
of this option in order to ensure that it does not result in distor-tionsofcompetition;2000L0012—EN—01.05.2004—003.001—46
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(s) thelow-riskoff-balance-sheetitemsreferredtoinAnnexII,tothe
extent that an agreement has been concluded with the client orgroup of connected clients under which the exposure may be
incurred only if it has been ascertained that it will not cause the
limitsapplicableunderparagraphs1,2and3tobeexceeded.
8. For the purposes of paragraphs 1, 2 and 3, Member States may
apply a weighting of 20 % to asset items constituting claims on
Member State regional and local authorities and to other exposures toor guaranteed by such authorities; subject to the conditions laid downinArticle44,however,MemberStatesmayreducethatrateto0%.
9. For the purposes of paragraphs 1, 2 and 3, Member States may
apply a weighting of 20 % to asset items constituting claims on andotherexposurestocreditinstitutionswithamaturityofmorethanonebutnotmore than three years anda weighting of50%toassetitemsconstituting claims on credit institutions with a maturity of more than
threeyears,providedthatthelatterarerepresentedbydebtinstruments
thatwereissuedbyacreditinstitutionandthatthosedebtinstrumentsare, in the opinion of the competent authorities, effectively negotiableonamarketmadeupofprofessionaloperatorsandaresubjecttodailyquotation onthat market, or the issue of which wasauthorised bythecompetent authorities of the Member State of origin of the issuing
credit institutions. In no case may any of these items constitute own
funds.
10. By way of derogation fromparagraphs 7(i) and 9, Mem ber
States may apply a weighting of 20 % to asset items constituting
claimsonandotherexposurestocreditinstitutions,regardlessoftheir
maturity.
11. Whereanexposuretoaclientisguaranteedbyathirdparty,or
bycollateralintheformofsecuritiesissuedbyathirdpartyunderthe
conditionslaiddowninparagraph7(o),MemberStatesmay:
— treat theexposureashavingbeenincurredtothethirdpartyrather
than to the client, if the exposure is directly and unconditionallyguaranteed by that third party, to the satisfaction of the competentauthorities,
— treat theexposureashavingbeenincurredtothethirdpartyrather
thantotheclient,iftheexposuredefinedinparagraph7(o)isguar-
anteedbycollateralundertheconditionstherelaiddown.
12. By1 January 1999 at the latest, the Council shall, onthe basis
of a report from the Commission, examine the treatment of interbank
exposuresprovidedforinparagraphs7(i),9and10.TheCouncilshalldecideonanychangestobemadeonaproposalfromtheCommission.
Article 50
Supervision on a consolidated or unconsolidated basis of large
exposures
1. If the credit institution is neither a parent undertaking nor a
subsidiary, compliance with the obligations imposed in Articles 48and 49 or in any other Community provision applicable to this areashallbemonitoredonanunconsolidatedbasis.
2. In the other cases, compliance with the obligations imposed in
Articles48and49orinanyotherCommunityprovisionapplicable tothisareashallbemonitoredonaconsolidatedbasisinaccordancewithArticles52to56.
3. Member States may waive monitoring on an individual or
subconsolidated basis of compliance with the obligations imposed inArticles48and49orinanyotherCommunityprovisionapplicable tothis area by a credit institution which, as a parent undertaking, issubjecttomonitoringonaconsolidatedbasisandbyanysubsidiaryof
such a credit institution which is subject to their authoritisation and
supervisionandiscoveredbymonitoringonaconsolidatedbasis.
Member States also waive such monitoring where the parent under-
takingisafinancialholdingcompanyestablishedinthesameMember2000L0012—EN—01.05.2004—003.001—47
▼B
State as the credit institution, provided that company is subject to the
samemonitoringascreditinstitutions.
Inthecasesreferredtointhefirstandsecondsubparagraphsmeasures
must be taken to ensure the satisfactory allocation of risks within the
group.
Section4
Qualifying holdings outside the financial sector
Article 51
Limitstonon-financialqualifyingholdings
1. Nocreditinstitutionmayhaveaqualifyingholdingtheamountof
which exceeds 15 % of its own funds in an undertaking which is
neither a credit institution, nor a financial institution, nor an under-
taking carrying on an activity referred to in the second subparagraphofArticle43(2)(f)ofDirective86/635/EEC.
2. The total amount of a credit institution's qualifying holdings in
undertakings other than credit institutions, financial institutions orundertakings carrying on activities referred to in the second subpara-graph of Article 43(2)(f) of Directive 86/635/EEC may not exceed
60%ofitsownfunds.
3. The MemberStates need notapply the limits laid downinpara-
graphs 1 and 2 to holdings in insurance companies as defined inDirective 73/239/EEC and Directive 79/267/EEC, or in reinsurancecompaniesasdefinedinDirective98/78/EC.
4. Shares held temporarily during a financial reconstruction or
rescue operation or during the normal course of underwriting or in aninstitution's own name on behalf of others shall not be counted as
qualifyingholdingsforthepurposeofcalculating thelimitslaiddown
in paragraphs 1 and 2. Shares which are not financial fixed assets asdefinedinArticle35(2)ofDirective86/635/EECshallnotbeincluded.
5. Thelimitslaiddowninparagraphs1and2maybeexceededonly
in exceptional circumstances. In such cases, however, the competentauthorities shall require a credit institution either to increase its ownfundsortotakeotherequivalentmeasures.
6. The Member States may provide that the competent authorities
shall not apply the limits laid down in paragraphs 1 and 2 if they
providethat100%oftheamountsbywhichacreditinstitution'squali-
fyingholdingsexceed thoselimits mustbecoveredbyownfundsandthat the latter shall not be included in the calculation of the solvencyratio.Ifboththelimitslaiddowninparagraphs1and2areexceeded,the amount to be covered by own funds shall be the greater of theexcessamounts.
CHAPTER3
SUPERVISIONONACONSOLIDATEDBASIS
Article 52
Supervisiononaconsolidatedbasisofcredit institutions
1. Every credit institution which has a credit institution or a finan-
cial institution as a subsidiary or which holds a participation in suchinstitutionsshallbesubject,totheextentandinthemannerprescribed
in Article 54, to supervision on the basis of its consolidated financial
situation. Such supervision shall be exercised at least in the areasreferredtoinparagraphs5and6.
2. Every credit institution the parent undertaking of which is a
financial holding company shall be subject, to the extent and in themanner prescribed in Article 54, to supervision on the basis of theconsolidated financial situation of that financial holding company.2000L0012—EN—01.05.2004—003.001—48
▼M2
▼B
▼B
Such supervision shall be exercised at least in the areas referred to in
paragraphs5and6. ►M2WithoutprejudicetoArticle54a,theconso-
lidation of the financial situation of the financial holding company
shallnotinanywayimply thatthe competent authorities arerequired
toplayasupervisoryroleinrelationtothefinancialholdingcompanyonastand-alonebasis. ◄
3. The Member States or the competent authorities responsible for
exercising supervision on a consolidated basis pursuant to Article 53maydecideinthecaseslisted belowthatacredit institution, financialinstitution or auxiliary banking services undertaking which is asubsidiary or in which a participation is held need not be included in
theconsolidation:
— if the undertaking that should be included is situated in a third
country where there are legal impediments to the transfer of thenecessaryinformation,
— if,intheopinionofthecompetent authorities, theundertakingthat
shouldbeincludedisofnegligibleinterestonlywithrespecttothe
objectives of monitoring credit institutions and in all cases if the
balance-sheet total of the undertaking that should be included islessthanthesmallerofthefollowingtwoamounts:EUR10millionor 1 % of the balance-sheet total of the parent undertaking or theundertaking that holds the participation. If several undertakings
meet the above criteria, they must nevertheless be included in the
consolidation where collectively they are of non-negligible interestwithrespecttotheaforementionedobjectives,or
— if,intheopinionofthecompetent authoritiesresponsibleforexer-
cisingsupervisiononaconsolidated basis,the consolidation ofthe
financialsituationoftheundertakingthatshouldbeincludedwould
beinappropriateormisleadingasfarastheobjectivesofthesuper-visionofcreditinstitutionsareconcerned.
4. WhenthecompetentauthoritiesofaMemberStatedonotinclude
a credit institution subsidiary in supervision on a consolidated basisunderoneofthecasesprovidedforinthesecondandthirdindentsofparagraph 3, the competent authorities of the Member State in whichthat credit institution subsidiary is situated may ask the parent under-
taking for information which may facilitate their supervision of that
creditinstitution.
5. Supervision of solvency, and of the adequacy of own funds to
cover market risks and control of large exposures shall be exercised
onaconsolidatedbasisinaccordancewiththisArticleandArticles53
to 56. Member States shall adopt any measures necessary, whereappropriate, to include financial holding companies in consolidatedsupervision,inaccordancewithparagraph2.
CompliancewiththelimitssetinArticle51(1)and(2)shallbesuper-
visedandcontrolledonthebasisoftheconsolidatedorsubconsolidatedfinancialsituationofthecreditinstitution.
6. The competent authorities shall ensure that, in all the undertak-
ings included in the scope of the supervision on a consolidated basisthat is exercised over a credit institution in implementation of para-graphs1and2,thereareadequateinternalcontrolmechanismsforthe
productionofanydataandinformationwhichwouldberelevantforthe
purposesofsupervisiononaconsolidatedbasis.
7. Withoutprejudicetospecificprovisionscontainedinotherdirec-
tives, Member States may waive application, on an individual or
subconsolidatedbasis,oftheruleslaiddowninparagraph5toacredit
institution that, as a parent undertaking, is subject to supervision onaconsolidated basis, and to any subsidiary of such a credit institutionwhich is subject to their authorisation and supervision andis includedinthesupervisiononaconsolidatedbasisofthecreditinstitutionwhich
is the parent company. The same exemption option shall be allowed
where the parent undertaking is a financial holding company whichhas its head office inthe same Member State as the credit institution,provided that it is subject to the same supervision as that exercisedover credit institutions, and in particular the standards laid down inparagraph5.2000L0012—EN—01.05.2004—003.001—49
▼B
In both cases set out in the first subparagraph, steps must be taken to
ensurethatcapitalisdistributedadequatelywithinthebankinggroup.
If the competent authorities apply those rules individually to such
creditinstitutions,theymay,forthepurposeofcalculating ownfunds,makeuseoftheprovisioninthelastsubparagraphofArticle3(2).
8. Where a credit institution the parent of which is a credit institu-
tion has been authorised and is situated in another Member State, the
competent authorities which granted that authorisation shall apply the
rules laid down in paragraph 5 to that institution on an individual or,whenappropriate,asubconsolidatedbasis.
9. Notwithstanding the requirements of paragraph 8, the competent
authoritiesresponsibleforauthorisingthesubsidiaryofaparentunder-taking which is a credit institution may, by bilateral agreement,delegatetheirresponsibilityforsupervisiontothecompetentauthoritieswhich authorised and supervise the parent undertaking so that they
assume responsibility for supervising the subsidiary in accordance
with this Directive. The Commission must be kept informed of theexistence and content of such agreements. It shall forward such infor-mationtothecompetentauthoritiesoftheotherMemberStatesandtotheBankingAdvisoryCommittee.
10. Member States shall provide that their competent authorities
responsibleforexercisingsupervisiononaconsolidatedbasismayaskthe subsidiaries of a credit institution or a financial holding company
which are not included within the scope of supervision on a consoli-
dated basis for the information referred to in Article 55. In such acase, the procedures for transmitting and verifying the informationlaiddowninthatArticleshallapply.
Article 53
Competent authorities responsible for exercising supervision on a
consolidatedbasis
1. Whereaparentundertakingisacreditinstitution,supervisionon
aconsolidatedbasisshallbeexercisedbythecompetentauthoritiesthat
authoriseditunderArticle4.
2. Where the parent of a credit institution is a financial holding
company, supervision on a consolidated basis shall be exercised by
thecompetent authoritieswhichauthorisedthatcreditinstitutionunderArticle4.
However,where credit institutions authorised in twoormore Member
Stateshaveastheirparentthesamefinancialholdingcompany,super-vision on a consolidated basis shall be exercised by the competentauthorities of the credit institution authorised in the Member State inwhichthefinancialholdingcompanywassetup.
If no credit institution subsidiary has been authorised in the Member
State in which the financial holding company was set up, the compe-
tent authorities of the Member States concerned (including those of
theMemberStateinwhichthefinancialholdingcompanywassetup)shall seek to reach agreement as to who amongst them will exercisesupervisiononaconsolidatedbasis.Intheabsenceofsuchagreement,supervisiononaconsolidatedbasisshallbeexercisedbythecompetentauthorities that authorised the credit institution with the greatest
balance-sheettotal;ifthatfigureisthesame,supervisiononaconsoli-
dated basisshallbeexercised bythecompetent authorities whichfirstgavetheauthorisationreferredtoinArticle4.
3. Thecompetentauthoritiesconcernedmaybycommonagreement
waivetheruleslaiddowninthefirstandsecondsubparagraphofpara-graph2.
4. Theagreementsreferredtointhethirdsubparagraphofparagraph
2andinparagraph 3shall provide forprocedures forcooperation andforthetransmissionofinformationsuchthattheobjectivesofsupervi-siononaconsolidatedbasiscanbeattained.2000L0012—EN—01.05.2004—003.001—50
▼B
5. Where Member States have more than one competent authority
fortheprudentialsupervisionofcreditinstitutionsandfinancialinstitu-tions, Member States shall take the requisite measures to organise
coordinationbetweensuchauthorities.
Article 54
Formandextentofconsolidation
1. The competent authorities responsible for exercising supervision
on a consolidated basis must, for the purposes of supervision, require
fullconsolidationofallthecreditinstitutionsandfinancialinstitutionswhicharesubsidiariesofaparentundertaking.
However, proportional consolidation may be prescribed where, in the
opinion of the competent authorities, the liability of a parent under-taking holding a share of the capital is limited to that share of thecapital because of the liability of the other shareholders or memberswhose solvency is satisfactory. The liability of the other shareholdersand members must be clearly established, if necessary by means of
formalsignedcommitments.
Inthecase whereundertakings arelinked bya relationship withinthe
meaning of Article 12 (1) of Directive 83/349/EEC, the competentauthoritiesshalldeterminehowconsolidationistobecarriedout.
2. Thecompetentauthoritiesresponsibleforcarryingoutsupervision
onaconsolidatedbasismust,inordertodoso,requiretheproportionalconsolidation ofparticipations incredit institutions andfinancial insti-tutions managed by an undertaking included in the consolidation
together withoneormore undertakingsnotincluded inthe consolida-
tion, where those undertakings' liability is limited to the share of thecapitaltheyhold.
3. In the case of participations or capital ties other than those
referredtoinparagraphs1and2,thecompetentauthoritiesshalldeter-minewhetherandhowconsolidationistobecarriedout.Inparticular,theymaypermitorrequireuseoftheequitymethod.Thatmethodshallnot, however, constitute inclusion of the undertakings concerned insupervisiononaconsolidatedbasis.
4. Withoutprejudicetoparagraphs1,2and3,thecompetentautho-
rities shall determine whether and how consolidation is to be carriedoutinthefollowingcases:
— where,intheopinionofthecompetent authorities, acredit institu-
tion exercises a significant influence over one or more credit
institutionsorfinancialinstitutions,butwithoutholdingaparticipa-tionorothercapitaltiesintheseinstitutions,
— where two or more credit institutions or financial institutions are
placed under single management other than pursuant to a contract
orclausesoftheirmemorandaorarticlesofassociation.
In particular, the competent authorities may permit, or require use of,the method provided for in Article 12 of Directive 83/349/EEC. Thatmethod shall not, however, constitute inclusion of the undertakingsconcernedinconsolidatedsupervision.
5. Where consolidated supervision is required pursuant to Article
52(1)and(2),ancillarybankingservicesundertakingsshallbeincludedinconsolidationsinthecases,andinaccordancewiththemethodslaiddowninparagraphs1to4ofthisArticle.2000L0012—EN—01.05.2004—003.001—51
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Article 54a
Managementbodyoffinancialholdingcompanies
TheMemberStatesshallrequirethatpersonswhoeffectivelydirectthe
businessofafinancialholdingcompanyareofsufficientlygoodreputeandhavesufficientexperiencetoperformthoseduties.
Article 55
Information to be supplied by mixed-activity holding companies
andtheir subsidiaries
1. Pending further coordination of consolidation methods, Member
Statesshallprovidethat,wheretheparentundertakingofoneormorecredit institutions is a mixed-activity holding company, the competentauthorities responsible for the authorisation and supervision of thosecredit institutions shall, by approaching the mixed-activity holding
company and its subsidiaries either directly or via credit institution
subsidiaries, require themto supply any inform ation which would berelevant for the purpose of supervising the credit institution subsidi-aries.
2. MemberStatesshallprovidethattheircompetentauthoritiesmay
carry out, or have carried out by external inspectors, on-the-spotinspectionstoverifyinformation received frommixed-activityholdingcompanies and their subsidiaries. If the mixed-activity holding
company or one of its subsidiaries is an insurance undertaking, the
procedure laid down in Article 56(4) may also be used. If a mixed-activity holding company or one of its subsidiaries is situated in aMemberStateotherthanthatinwhichthecreditinstitutionsubsidiaryis situated, on-the-spot verification of information shall be carried out
inaccordancewiththeprocedurelaiddowninArticle56(7).
Article 55a
Intra-grouptransactionswithmixed-activity holdingcompanies
WithoutprejudicetotheprovisionsofTitleV,Chapter2,Section3,of
this Directive, Member States shall provide that, where the parentundertaking of one or more credit institutions is a mixed-activityholding company, the competent authorities responsible for the super-
vision of these credit institutions shall exercise general supervision
over transactions between the credit institution and the mixed-activityholdingcompanyanditssubsidiaries.
Competent authorities shall require credit institutions to have in place
adequate riskmanagement processes and internal control mechanisms,includingsoundreportingandaccountingprocedures,inordertoiden-tify,measure,monitorandcontroltransactionswiththeirparentmixed-activityholdingcompanyanditssubsidiariesappropriately.Competent
authorities shall require the reporting by the credit institution of any
significanttransactionwiththeseentitiesotherthantheonereferredtoin Article 48. These procedures and significant transactions shall besubjecttooverviewbythecompetentauthorities.
Wheretheseintra-grouptransactionsareathreattoacreditinstitution's
financial position,the competent authority responsible forthe supervi-sionoftheinstitutionshalltakeappropriatemeasures.
Article 56
Measurestofacilitate supervisiononaconsolidatedbasis
1. MemberStatesshalltakethenecessarystepstoensurethatthere
are no legal impediments preventing the undertakings included withinthe scope of supervision on a consolidated basis, mixed-activityholding companies and their subsidiaries, or subsidiaries of the kindcovered in Article 52(10), from exchanging amongst themselves any2000L0012—EN—01.05.2004—003.001—52
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informationwhichwouldberelevantforthepurposesofsupervisionin
accordancewithArticles52to55andthisArticle.
2. Where a parent undertaking and any of its subsidiaries that are
credit institutions are situated in different Member States, the compe-tent authorities of each Member State shall communicate to eachother all relevant information which may allow or aid the exercise of
supervisiononaconsolidatedbasis.
WherethecompetentauthoritiesoftheMemberStateinwhichaparent
undertaking is situated do not themselves exercise supervision on a
consolidated basis pursuant to Article 53, they may be invited by the
competent authorities responsible for exercising such supervision toask the parent undertaking for any information which would be rele-vant for the purposes of supervision on a consolidated basis and totransmitittotheseauthorities.
3. MemberStatesshallauthorisetheexchangebetweentheircompe-
tent authorities of the information referred to in paragraph 2, on theunderstanding that, in the case of financial holding companies, finan-cial institutions or ancillary banking services undertakings, the
collection or possession of information shall not in any way imply
that the competent authorities are required to play a supervisory roleinrelationtothoseinstitutionsorundertakingsstandingalone.
Similarly,MemberStatesshallauthorisetheircompetentauthoritiesto
exchangetheinformationreferredtoinArticle55ontheunderstanding
that the collection or possession of information does not in any wayimplythatthecompetentauthoritiesplayasupervisoryroleinrelationto the mixed-activity holding company and those of its subsidiarieswhicharenotcreditinstitutions,ortosubsidiariesofthekindcoveredinArticle52(10).
4. Whereacreditinstitution,financialholdingcompanyoramixed-
activity holding company controls one or more subsidiaries which areinsurance companies or other undertakings providing investment
services which are subject to authorisation, the competent authorities
andthe authorities entrusted withthe public taskofsupervisinginsur-ance undertakings or those other undertakings providing investmentservices shall cooperate closely. Without prejudice to their respectiveresponsibilities, those authorities shall provide one another with anyinformation likely to simplify their task and to allow supervision of
the activity and overall financial situation of the undertakings they
supervise.
5. Information received, in the framework of supervision on a
consolidated basis, and in particular any exchange of information
between competent authorities which is provided forin this Directive,shall be subject to the obligation of professional secrecy defined inArticle30.
6. Thecompetentauthoritiesresponsibleforsupervisiononaconso-
lidated basis shall establish lists of the financial holding companiesreferred to in Article 52(2). Those lists shall be communicated to thecompetent authorities oftheotherMember Statesandtothe Commis-sion.
7. Where, in applying this Directive, the competent authorities of
one Member State wish in specific cases to verify the informationconcerningacreditinstitution,afinancialholdingcompany,afinancialinstitution, an ancillary banking services undertaking, a mixed-activity
holding company, a subsidiary of the kind covered in Article 55 or a
subsidiary of the kind covered in Article 52(10), situated in anotherMember State, they must ask the competent authorities of that otherMember State to have that verification carried out. The authoritieswhich receive such a request must, within the framework of their
competence, act upon it either by carrying out the verification them-
selves, by allowing the authorities who made the request to carry itout, or by allowing an auditor or expert to carry it out. ►
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8. Without prejudice to their provisions of criminal law, Member
Statesshallensurethatpenaltiesormeasuresaimedatendingobservedbreaches or the causes of such breaches may be imposed on financial
holding companies and mixed-activity holding companies, or their
effective managers, that infringe laws, regulation or administrativeprovisionsenacted to implement Articles 52to 55and this Article. Incertaincases,suchmeasuresmayrequiretheinterventionofthecourts.The competent authorities shall cooperate closely to ensure that the
abovementioned penalties or measures produce the desired results,
especially when the central administration or main establishment of afinancial holding company or of a mixed-activity holding company isnotlocatedatitsheadoffice.
Article 56a
Third-countryparentundertakings
Where a credit institution, the parent undertaking of which is a credit
institutionorafinancial holdingcompany,theheadofficeofwhichis
outside the Community, is not subject to consolidated supervision
under Article 52, the competent authorities shall verify whether thecredit institution is subject to consolidated supervision by a third-country competent authority which is equivalent to that governed bytheprincipleslaiddowninArticle52.Theverificationshallbecarriedoutbythecompetent authoritywhichwouldberesponsibleforconso-
lidated supervision if the fourth subparagraph were to apply, at the
request of the parent undertaking or of any of the regulated entitiesauthorised in the Community or on its own initiative. That competentauthorityshallconsulttheothercompetentauthoritiesinvolved.
The Banking Advisory Committee may give general guidance as to
whethertheconsolidatedsupervisionarrangementsofcompetentautho-
rities in third countries are likely to achieve the objectives ofconsolidatedsupervisionasdefinedinthisChapter,inrelationtocreditinstitutions,theparentundertakingofwhichhasitsheadofficeoutsidethe Community. The Committee shall keep any such guidance under
reviewandtakeintoaccount anychangestotheconsolidatedsupervi-
sionarrangementsappliedbysuchcompetentauthorities.
The competent authority carrying out the verification specified in the
second subparagraph shall take into account any such guidance. Forthis purpose the competent authority shall consult the Committee
beforetakingadecision.
In the absence of such equivalent supervision, Member States shall
applytheprovisionsofArticle52tothecreditinstitutionbyanalogy.
As an alternative, Member States shall allow their competent authori-
ties to apply other appropriate supervisory techniques which achieve
theobjectivesofthesupervisiononaconsolidatedbasisofcreditinsti-
tutions. Those methods must be agreed upon by the competentauthority which would be responsible for consolidated supervision,after consultation with the other competent authorities involved.Competent authorities may inparticular require the establishment ofa
financialholdingcompanywhichhasitsheadofficeintheCommunity,
and apply the provisions on consolidated supervision to the consoli-dated position of that financial holding company. The methods mustachieve the objectives of consolidated supervision as defined in thisChapter and must be notified to the other competent authoritiesinvolvedandtheCommission.2000L0012—EN—01.05.2004—003.001—54
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TITLEVI
BANKINGADVISORYCOMMITTEE
Article 57
CompositionandtasksoftheBankingAdvisoryCommittee
1. A Banking Advisory Committee of the competent authorities of
theMemberStatesshallbesetupalongsidetheCommission.
2. The tasks of the Banking Advisory Committee shall be to assist
the Commission in ensuring the proper implementation of this Direc-tive. Further it shall carry out the other tasks prescribed by this
Directive and shall assist the Commission in the preparation of new
proposalstothe Council concerning furthercoordination inthesphereofcreditinstitutions.
3. The Banking Advisory Committee shall not concern itself with
concreteproblemsrelatingtoindividualcreditinstitutions.
4. TheBankingAdvisoryCommitteeshallbecomposedofnotmore
than three representatives fromeach Mem ber State and fromtheCommission. These representatives may be accompanied by advisersfromtimetotimeandsubjecttotheprioragreementoftheCommittee.
TheCommittee mayalsoinvitequalified personsandexpertstoparti-
cipate in its meetings. The secretariat shall be provided by theCommission.
5. The Banking AdvisoryCommittee shall adopt its rules of proce-
dure andelect a chairman from among the representatives ofMember
States. It shall meet at regular intervals and whenever the situationdemands. The Commission may ask the Committee to hold an emer-gencymeetingifitconsidersthatthesituationsorequires.
6. TheBanking AdvisoryCommittee's discussionsandthe outcome
thereofshallbeconfidentialexceptwhentheCommitteedecidesother-
wise.
Article 58
Examinationoftherequirementsforauthorisation
The Banking AdvisoryCommittee shall examine the content given by
the competent authorities to requirements listed in Articles 5(1) and6(1), any other requirements which the Member States apply and theinformation which must be included in the programme of operations,
and shall, where appropriate, make suggestions to the Commission
withaviewtoamoredetailedcoordination.
Article 59
Observationratios
1. Pendingsubsequentcoordination, thecompetent authorities shall,
for the purposes of observation and, if necessary, in addition to suchcoefficients as may be applied by them, establish ratios between thevarious assets and/or liabilities of credit institutions with a view tomonitoring their solvency and liquidity and the other measures which
mayservetoensurethatsavingsareprotected.
To this end, the Banking Advisory Committee shall decide on the
content of the various factors of the observation ratios referred to inthefirstsubparagraphandlaydownthemethodtobeappliedincalcu-
latingthem.
Where appropriate, the Banking Advisory Committee shall be guided
by technical consultations between the supervisory authorities of thecategoriesofinstitutionsconcerned.
2. The observation ratios established in pursuance of paragraph 1
shallbecalculatedatleasteverysixmonths.
3. The Banking Advisory Committee shall examine the results of
analyses carried out by the supervisory authorities referred to in the2000L0012—EN—01.05.2004—003.001—55
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third subparagraph of paragraph 1 on the basis of the calculations
referredtoinparagraph2.
4. The Banking Advisory Committee may make suggestions to the
Commissionwithaviewtocoordinatingthecoefficients applicable intheMemberStates.
TITLEVII
POWERSOFEXECUTION
Article 60
Technicaladaptations
1. Without prejudice, regardingownfunds,tothereport referred to
in the second subparagraph of Article 34(3), the technical adaptationsin the following areas shall be adopted in accordance with the proce-durelaiddowninparagraph2:
— clarificationofthedefinitionsinordertotakeaccountintheappli-
cationofthisDirectiveofdevelopmentsonfinancialmarkets,
— clarification ofthedefinitionstoensureuniformapplication ofthis
DirectiveintheCommunity,
— the alignment of terminology on and the framing of definitions in
accordance with subsequent acts on credit institutions and relatedmatters,
— thedefinitionof‘ZoneA’inArticle1(14),
— thedefinitionof‘multilateraldevelopmentbanks’inArticle1(19),
— alteration oftheamountofinitial capital prescribedinArticle 5to
takeaccountofdevelopmentsintheeconomicandmonetaryfield,
— expansionofthecontentofthelistreferredtoinArticles18and19
andsetoutinAnnexIoradaptationoftheterminologyusedinthat
listtotakeaccountofdevelopmentsonfinancialmarkets,
— the areas in which the competent authorities must exchange infor-
mationaslistedinArticle28,
— amendment of the definitions of the assets listed in Article 43 in
ordertotakeaccountofdevelopmentsonfinancialmarkets,
— the list and classification of off-balance-sheet items in Annexes II
and IV and their treatment in the calculation of the ratio asdescribedinArticles42,43and44andAnnexIII,
— atemporaryreductionintheminimumratioprescribedinArticle47
ortheweightingprescribedinArticle43inordertotakeaccountofspecificcircumstances,
— clarificationofexemptionsprovidedforinArticle49(5)to(10).
2. TheCommissionshallbeassistedbyacommittee.Where reference is made to this paragraph, Articles 5 and 7 of Deci-
sion 1999/468/EC shall apply, having regard to the provisions ofArticle8thereof.
TheperiodlaiddowninArticle5(6)ofDecision1999/468/ECshallbe
setatthreemonths.
TheCommitteeshalladoptitsrulesofprocedure.
TITLEVIII
TRANSITIONALANDFINALPROVISIONS
CHAPTER1
TRANSITIONALPROVISIONS
Article 61
TransitionalprovisionsregardingArticle 36
Denmarkmayallowitsmortgagecreditinstitutionsorganisedascoop-
erative societies or funds before 1 January 1990 and converted into2000L0012—EN—01.05.2004—003.001—56
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public limited liability companies to continue to include joint and
several commitments of members, or of borrowers as referred to inArticle36(1)claimsonwhomaretreatedinthesamewayassuchjoint
andseveralcommitments, intheirownfunds,subjecttothefollowing
limits:
(a) the basis for calculation of the part of joint and several commit-
ments of borrowers shall be the total of the items referred to in
Article 34(2)(1) and (2), minus those referred to in Article34(2)(9),(10)and(11);
(b) the basis for calculation on 1 January 1991 or, if converted at a
later date, onthe date onconversion, shall be the maximum basisfor calculation. The basis for calculation may never exceed themaximumbasisforcalculation;
(c) the maximum basis for calculation shall, from 1 January 1997, be
reduced byhalf of the proceeds fromany issue of new capital, as
definedinArticle34(2)(1),madeafterthatdate;and
(d) the maximum amount of joint and several commitments of
borrowerstobeincludedasownfundsmustneverexceed:
50%in1991and1992,
45%in1993and1994,40%in1995and1996,35%in1997,30%in1998,20%in1999,10%in2000,and0%after1January2001,ofthebasisforcalculation.
Article 62
TransitionalprovisionsregardingArticle 43
1. Until 31 December 2006, the competent authorities of the
Member States may authorise their credit institutions to apply a 50%risk weighting to loans fully and completely secured to their satisfac-
tion by mortgages on offices or on multi-purpose commercial
premisessituatedwithintheterritoryofthoseMemberStatesthatallowthe50%riskweighting,subjecttothefollowingconditions:
(i) the 50 % risk weighting applies to the part of the loan that does
notexceedalimitcalculatedaccordingtoeither(a)or(b):
(a) 50%ofthemarketvalueofthepropertyinquestion.
The market value of the property must be calculated by two
independent valuers making independent assessments at the
time the loan is made. The loan must be based on the lowerofthetwovaluations.
The property shall be revalued at least once a year by one
valuer. For loans not exceeding EUR 1 million and 5 % ofthe own funds of the credit institution, the property shall berevaluedatleasteverythreeyearsbyonevaluer;
(b) 50%ofthemarketvalueofthepropertyor60%ofthemort-
gage lending value, whichever is lower, in those Member
Statesthathavelaiddownrigorouscriteriafortheassessmentofthemortgagelendingvalueinstatutoryorregulatoryprovi-sions.
Themortgagelendingvalueshallmeansthevalueoftheprop-
ertyasdeterminedbyavaluermakingaprudentassessmentofthefuturemarketabilityofthepropertybytakingintoaccount
long-termsustainable aspects of the property, the norm al and
localmarketconditions,thecurrentuseandalternativeappro-priate uses of the property. Speculative elements shall not betaken into account in the assessment of the mortgage lendingvalue. The mortgage lending value shall be documented n atransparentandclearmanner.2000L0012—EN—01.05.2004—003.001—57
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Atleast every three yearsorifthe market fallsbymore than
10%the mortgage lending value andinparticular theunder-lyingassumptionsconcerningthedevelopmentoftherelevant
market,shallbereassessed.
In both (a) and (b) ‘market value’ shall mean the price at which
the property could be sold under private contract between awilling seller and an arm's-length buyer on the date of valuation,it being assumed that the property is publicly exposed to the
market, that market conditions permit orderly disposal and that a
normal period, having regard to the nature of the property, isavailableforthenegotiationofthesale;
(ii) the 100 % risk weighting applies to the part of the loan that
exceedsthelimitssetoutin(i);
(iii) thepropertymustbeeitherusedorletbytheowner.
Thefirstsubparagraphshallnotpreventthecompetent authoritiesofa
Member State, which applies a higher risk weighting in its territory,fromallowing, under the conditions defined above, the 50 % riskweighting to apply for this type of lending in the territories of those
MemberStatesthatallowthe50%riskweighting.
ThecompetentauthoritiesoftheMemberStatesmayallowtheircredit
institutionstoapplya50%riskweightingtotheloansoutstandingon21 July 2000 provided that the conditions listed in this paragraph arefulfilled. In this case the property shall be valued according to the
assessmentcriterialaiddownabovenotlaterthan21July2003.
For loans granted before 31 December 2006, the 50 % risk weighting
remainsapplicableuntiltheirmaturity,ifthecreditinstitutionisboundtoobservethecontractualterms.
Until 31 December 2006, the competent authorities of the Member
State may also authorise their credit institutions to apply a 50 % riskweightingtothepartoftheloansfullyandcompletelysecuredtotheirsatisfactionbysharesinFinnishhousingcompaniesoperatinginaccor-dance with the Finnish Housing Company Act of 1991 or subsequent
equivalent legislation, provided that the conditions laid down in this
paragrapharefulfilled.
Member States shall inform the Commission of the use they make of
thisparagraph.
2. Member States may apply a 50 % risk weighting to property
leasing transactions concluded before 31 December 2006 andconcerning assets for business use situated in the country of the headoffice andgoverned bystatutory provisionswherebythe lessorretains
full ownership of the rented asset until the tenant exercises his option
to purchase. Member States shall inform the Commission of the usetheymakeofthisparagraph.
3. Article 43(3) shall not affect the competent authorities' recogni-
tionofbilateralcontractsfornovationconcludedconcerning:
— Belgium,before23April1996,
— Denmark,before1June1996,
— Germany,before30October1996,
— Greece,before27March1997,— Spain,before7January1997,— France,before30May1996,— Ireland,before27June1996,— Italy,before30July1996,— Luxembourg,before29May1996,
— theNetherlands,before1July1996,
— Austria,before30December1996,— Portugal,before15January1997,— Finland,before21August1996,— Sweden,before1June1996,and— UnitedKingdom,before30April1996.2000L0012—EN—01.05.2004—003.001—58
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Article 63
TransitionalprovisionsregardingArticle 47
1. Acreditinstitution, theminimum ratioofwhichhasnotreached
the8%prescribedinArticle47(1),by1January1991,mustgraduallyapproach that level bysuccessivestages.Itmaynotallowthe ratiotofall below the level reached before that objective has been attained.Any fluctuation should be temporary and the competent authoritiesshouldbeapprisedofthereasonsforit.
2. For not more than five years after 1 January 1993, the Member
States may fix a weighting of 10 % for the bonds defined in Article22(4) of Directive 85/611/EEC and maintain if for credit institutions
whenandif they consider it necessary, toavoid grave disturbancesin
theoperationoftheirmarkets.SuchexceptionsshallbereportedtotheCommission.
3. Fornotmorethansevenyearsafter1January1993,Article47(1)
shallnotapplytotheAgriculturalBankofGreece.However,thelattermust approach the level prescribed in Article 47(1) by successivestagesaccordingtothemethoddescribedinparagraph1ofthisArticle.
Article 64
TransitionalprovisionsregardingArticle 49
1. If, on 5 February 1993, a credit institution had already incurred
an exposure or exposures exceeding either the large exposure limit or
theaggregatelargeexposurelimitlaiddowninArticle49,thecompe-
tent authorities shall require the credit institution concerned to takestepstohavethatexposureorthoseexposuresbroughtwithinthelimitslaiddowninArticle49.
2. The process of having such an exposure or exposures brought
within authorised limits shall be devised, adopted, implemented andcompleted within the period which the competent authorities considerconsistentwiththeprincipleofsoundadministration andfaircompeti-tion. The competent authorities shall inform the Commission and the
Banking Advisory Committee of the schedule for the general process
adopted.
3. Acreditinstitutionmaynottakeanymeasurewhichwouldcause
the exposures referred to in paragraph 1 to exceed their level on 5February1993
4. Theperiodapplicableunderparagraph2shallexpirenolaterthan
31 December 2001. Exposures with a longer maturity, for which thelending institution is bound to observe the contractual terms, may becontinueduntiltheirmaturity.
5. Until 31 December 1998, Member States may increase the limit
laid downinArticle 49(1)to40%andthe limit laid downinArticle49(2)to30%.Insuchcasesandsubjecttoparagraphs1to4,thetimelimitforbringingtheexposuresexistingattheendofthisperiodwithin
thelimitlaiddowninArticle49shallexpireon31December2001.
6. In the case of credit institutions the own funds of which do not
exceed EUR 7 million and only in the case of such institutions,
Member States may extend the time limits laid down in paragraph 5
by five years. Member States that avail themselves of the optionprovidedforinthisparagraphshalltakestepstopreventdistortionsofcompetition and shall inform the Commission and the Banking Advi-soryCommitteethereof.
7. In the cases referred to in paragraphs 5 and 6, an exposure may
beconsideredalargeexposureifitsvalueisequaltoorexceeds15%ofownfunds.
8. Until 31 December 2001 Member States may substitute a
frequency of at least twice a year for the frequency of notification oflargeexposuresreferredtointhesecondindentofArticle48(2).2000L0012—EN—01.05.2004—003.001—59
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9. MemberStatesmayfullyorpartiallyexemptfromtheapplication
of Article 49(1), (2) and (3) exposures incurred by a credit institutionconsisting of mortgage loans as defined in Article 62(1) concluded
before 1 January 2002 as well as property leasing transactions as
definedinArticle62(2)concludedbefore1January2002,inbothcasesupto50%ofthevalueofthepropertyconcerned.
The same treatment applies toloanssecured, tothesatisfaction ofthe
competent authorities, bysharesinFinnishresidential housingcompa-nies, operating in accordance with the Finnish Housing Company Act
of 1991 or subsequent equivalent legislation which are similar to the
mortgageloansreferredtointhefirstsubparagraph.
Article 65
TransitionalprovisionsregardingArticle 51
Credit institutions which, on 1 January 1993, exceeded the limits laiddown in Articles 51(1) and (2) shall have until 1 January 2003 tocomplywiththem.
CHAPTER2
FINALPROVISIONS
Article 66
Commissioninformation
Member States shall communicate to the Commission the texts of the
mainlaws,regulations andadministrative provisionswhichtheyadopt
inthefieldcoveredbythisDirective.
Article 67
RepealedDirectives
1. Directives 73/183/EEC, 77/780/EEC, 89/299/EEC, 89/646/EEC,89/647/EEC, 92/30/EEC and 92/121/EEC, as amended by the Direc-tives set out in Annex V, Part A, are hereby repealed withoutprejudicetotheobligationsoftheMemberStatesconcerningthedead-linesfortranspositionofthesaidDirectiveslistedinAnnexV,PartB.
2. ReferencestotherepealedDirectivesshallbeconstruedasrefer-
ences to this Directive and should be read in accordance with the
correlationtableinAnnexVI.
Article 68
Implementation
This Directive shall enter into force on the 20th day following itspublicationinthe Official JournaloftheEuropeanCommunities .
Article 69
Addressees
ThisDirectiveisaddressedtotheMemberStates.2000L0012—EN—01.05.2004—003.001—60
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ANNEX I
LISTOFACTIVITIESSUBJECTTOMUTUALRECOGNITION
1. Acceptanceofdepositsandotherrepayablefunds
2. Lending(1)
3. Financialleasing4. Moneytransmissionservices
5. Issuing and administering means of payment (e.g. credit cards, travellers'
chequesandbankers'drafts)
6. Guaranteesandcommitments
7. Tradingforownaccountorforaccountofcustomersin:
(a) moneymarketinstruments(cheques,bills,certificatesofdeposit,etc.)
(b) foreignexchange;
(c) financialfuturesandoptions;
(d) exchangeandinterest-rateinstruments;
(e) transferablesecurities
8. Participation in securities issues and the provision of services related to
suchissues
9. Advice to undertakings on capital structure, industrial strategy and related
questions and advice as well as services relating to mergers and the
purchaseofundertakings
10. Moneybroking
11. Portfoliomanagementandadvice
12. Safekeepingandadministrationofsecurities13. Creditreferenceservices
14. Safecustodyservices2000L0012—EN—01.05.2004—003.001—61
(1) Including, interalia:
— consumercredit,— mortgagecredit,— factoring,withorwithoutrecourse,
— financingofcommercialtransactions(includingforfeiting).
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ANNEX II
CLASSIFICATIONOFOFF-BALANCE-SHEETITEMS
Fullrisk
— Guaranteeshavingthecharacterofcreditsubstitutes,
— Acceptances,— Endorsementsonbillsnotbearingthenameofanothercreditinstitution,— Transactionswithrecourse,— Irrevocable standby letters of credit having the character of credit substi-
tutes,
— Assetspurchasedunderoutrightforwardpurchaseagreements,
— Forwardforwarddeposits,— Theunpaidportionofpartly-paidsharesandsecurities,— Otheritemsalsocarryingfullrisk.
Mediumrisk— Documentarycreditsissuedandconfirmed(seealsomedium/lowrisk),
— Warrantiesandindemnities(includingtender,performance,customsandtax
bonds)andguaranteesnothavingthecharacterofcreditsubstitutes,
— AssetsaleandrepurchaseagreementsasdefinedinArticle12(3)and(5)of
Directive86/635/EEC,
— Irrevocablestandbylettersofcreditnothavingthecharacterofcreditsubsti-
tutes,
— Undrawn credit facilities (agreements to lend, purchase securities, provide
guarantees or acceptance facilities) with an original maturity of more than
oneyear,
— Noteissuancefacilities(NIFs)andrevolvingunderwritingfacilities(RUFs),— Otheritemsalsocarryingmediumrisk.
Medium/lowrisk
— Documentary credits in which underlying shipment acts as collateral and
otherself-liquidatingtransactions,
— Otheritemsalsocarryingmedium/lowrisk.
Lowrisk
— Undrawn credit facilities (agreements to lend, purchase securities, provide
guarantees or acceptance facilities) with an original maturity of up to and
including one year or which may be cancelled unconditionally at any time
withoutnotice,
— Otheritemsalsocarryinglowrisk.
The Member States undertake to inform the Commission as soon as they have
agreedtoincludeanewoff-balance-sheet iteminanyofthelastindentsunder
each category of risk. Such items will be definitively classified at Community
leveloncetheprocedurelaiddowninArticle60hasbeencompleted.2000L0012—EN—01.05.2004—003.001—62
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ANNEX III
THETREATMENTOFOFF-BALANCE-SHEETITEMS
1. CHOICEOFTHEMETHOD
Tomeasurethecreditrisksassociatedwiththecontractslistedinpoints1and2
of Annex IV, credit institutions may choose, subject to the consent of the
competent authorities, one of the methods set out below. Credit institutions
which have to comply with Article 6(1) of Directive 93/6/EEC(1) must use
method 1 set out below. To measure the credit risks associated with the
contracts listed in point 3 of Annex IV all credit institutions must use method
1setoutbelow.
2. METHODS
Method1:the‘marktomarket’approach
Step(a): by attaching current market values to contracts (mark to
market),thecurrentreplacement costofallcontractswithposi-
tivevaluesisobtained.
Step(b): to obtain a figure for potential future credit exposure(2), the
notional principal amounts or underlying values are multiplied
bythefollowingpercentages:
TABLE1(a)(b)
Residualmaturity(c)Interest-rate
contractsContracts
concerning
foreign-
exchange
ratesand
goldContracts
concerning
equitiesContracts
concerning
precious
metalsexcept
goldContracts
concerning
commodities
otherthan
precious
metals
Oneyearorless 0% 1% 6% 7% 10%
Over one year, less than
fiveyears0,5% 5% 8% 7% 12%
Overfiveyears 1,5% 7,5% 10% 8% 15%
(a) Contractswhichdonotfallwithinoneofthefivecategoriesindicatedinthistableshallbetreatedascontracts
concerningcommoditiesotherthanpreciousmetals.
(b) For contracts with multiple exchanges of principal, the percentages have to be multiplied by the number of
remainingpaymentsstilltobemadeaccordingtothecontract.
(c) Forcontractsthatarestructuredtosettleoutstandingexposurefollowingspecifiedpaymentdatesandwherethe
termsareresetsuchthatthemarketvalueofthecontractiszeroonthesespecifieddates,theresidualmaturitywouldbeequaltothetimeuntilthenextresetdate.Inthecaseofinterest-ratecontractsthatmeetthesecriteriaandhavearemainingmaturityofoveroneyear,thepercentageshallbenolowerthan0,5%.
Forthepurposeofcalculating thepotential futureexposureinaccordance with
step (b) the competent authorities may allow credit institutions until 31
December 2006 to apply the following percentages instead of those prescribed
inTable1providedthattheinstitutionsmakeuseoftheoptionsetoutinArticle
11a of Directive 93/6/EEC for contracts within the meaning of paragraph 3(b)
and(c)ofAnnexIV:
TABLE1a
ResidualmaturityPreciousmetals
(exceptgold)BasemetalsAgricultural
products(softs)Other,including
energyproducts
Oneyearorless 2% 2,5% 3% 4%
Over one year, less than five
years5% 4% 5% 6%
Overfiveyears 7,5% 8% 9% 10%2000L0012—EN—01.05.2004—003.001—63
(1) Council Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment
firmsandcredit institutions (OJL141,11.6.1993,p.1).Directive amendedbyDirec-tive98/33/EC(OJL204,21.7.1998,p.29).
(
2) Except in the case of single-currency ‘floating/floating’ interest rate swaps in which
onlythecurrentreplacementcostwillbecalculated.
▼B
Step(c): the sumof current replacem ent cost and potential future credit
exposure is multiplied by the risk weightings allocated to the
relevantcounterpartiesinArticle43.
Method2:the‘originalexposure’approach
Step(a): the notional principal amount of each instrument is multiplied
bythepercentagesgivenbelow:
TABLE2
Originalmaturity(1) Interest-ratecontractsContractsconcerning
foreign-exchangerates
andgold
Oneyearorless 0,5% 2%
Morethanoneyearbutnotexceedingtwoyears 1% 5%
Additionalallowanceforeachadditionalyear 1% 3%
(1) Inthecaseofinterest-ratecontracts,creditinstitutionsmay,subjecttotheconsentoftheircompetentauthorities,
chooseeitheroriginalorresidualmaturity.
Step(b): the original exposure thus obtained is multiplied by the risk
weightingsallocatedtotherelevantcounterpartiesinArticle43.
For methods 1 and 2 the competent authorities must ensure that the notional
amounttobetakenintoaccountisanappropriateyardstickfortheriskinherent
inthecontract.Where,forinstance,thecontractprovidesforamultiplicationof
cash flows,thenotional amount mustbeadjusted inorder totake intoaccount
theeffectsofthemultiplicationontheriskstructureofthatcontract.
3. CONTRACTUAL NETTING (CONTRACTS FOR NOVATION AND
OTHERNETTINGAGREEMENTS)
(a)Typesofnettingthatcompetentauthoritiesmayrecognise
For the purpose of this point 3 ‘counterparty’ means any entity (including
naturalpersons)thathasthepowertoconcludeacontractualnettingagree-
ment.
The competent authorities may recognise as risk-reducing the following
typesofcontractualnetting:
(i) bilateralcontractsfornovationbetweenacreditinstitutionanditscoun-
terparty under which mutual claims and obligations are automatically
amalgamated in such a way that this novation fixes one single net
amount each time novation applies and thus creates a legally binding,
singlenewcontractextinguishingformercontracts;
(ii) other bilateral agreements between a credit institution and its counter-
party.
(b)Conditionsforrecognition
The competent authorities may recognise contractual netting as risk-redu-
cingonlyunderthefollowingconditions:
(i) a credit institution must have a contractual netting agreement with its
counterparty which creates a single legal obligation, covering all
includedtransactions,suchthat,intheeventofacounterparty'sfailure
to performowing to default, bankruptcy, liquidation or any other
similar circumstance, the credit institution would have a claim to
receive or an obligation to pay only the net sumof the positive and
negativemark-to-marketvaluesofincludedindividualtransactions;
(ii) acreditinstitutionmusthavemadeavailabletothecompetentauthori-
tieswrittenandreasonedlegal opinionstotheeffect that,intheevent
of a legal challenge, the relevant courts and administrative authorities
would,inthecasesdescribedunder(i),findthatthecreditinstitution'sclaimsandobligationswouldbelimitedtothenetsum,asdescribedin
(i),under:
— thelawofthejurisdictioninwhichthecounterpartyisincorporated
and, if a foreign branch of an undertaking is involved, also under
thelawofthejurisdictioninwhichthebranchislocated,
— thelawthatgovernstheindividualtransactionsincluded,and
— the lawthatgovernsanycontract oragreement necessary toeffect
thecontractualnetting;2000L0012—EN—01.05.2004—003.001—64
▼B
(iii) a credit institution must have procedures in place to ensure that the
legalvalidityofitscontractualnettingiskeptunderreviewinthelight
ofpossiblechangesintherelevantlaws.
Thecompetentauthoritiesmustbesatisfied,ifnecessaryafterconsultingthe
othercompetentauthoritiesconcerned,thatthecontractualnettingislegally
valid under the law of each of the relevant jurisdictions. If any of the
competentauthoritiesarenotsatisfiedinthatrespect,thecontractualnetting
agreementwillnotberecognisedasrisk-reducingforeitherofthecounter-
parties.
Thecompetentauthoritiesmayacceptreasonedlegalopinionsdrawnupby
typesofcontractualnetting.
Nocontractcontainingaprovisionwhichpermitsanon-defaultingcounter-
partytomakelimitedpaymentsonly,ornopaymentsatall,totheestateof
the defaulter, even if the defaulter is a net creditor (a ‘walkaway’ clause),
mayberecognisedasrisk-reducing.
The competent authorities may recognise as risk-reducing contractual-
netting agreements covering foreign-exchange contracts with an original
maturity of14calendar daysorlesswritten optionsorsimilar off-balance-
sheet items to which this Annex does not apply because they bear only a
negligibleornocreditrisk.If,dependingonthepositiveornegativemarket
value of these contracts, their inclusion in another netting agreement can
result in an increase or decrease of the capital requirements, competent
authoritiesmustobligetheircreditinstitutiontouseaconsistenttreatment.
(c)Effectsofrecognition
(i)Contractsfornovation
Thesinglenetamountsfixedbycontractsfornovation,ratherthanthe
gross amounts involved, may be weighted. Thus, in the application of
method1,in
— step(a):thecurrentreplacementcost,andin
— step(b):thenotionalprincipalamountsorunderlyingvalues
may be obtained taking account of the contract for novation. In the
application ofmethod 2,in step(a)the notional principal amount may
be calculated taking account of the contract for novation; the percen-
tagesofTable2mustapply.
(ii)Othernetting agreements
Inapplicationofmethod1:
— instep(a)thecurrentreplacementcostforthecontractsincludedin
anettingagreementmaybeobtainedbytakingaccountoftheactual
hypotheticalnetreplacementcostwhichresultsfromtheagreement;
in the case where netting leads to a net obligation for the credit
institution calculating the net replacement cost,the current replace-
mentcostiscalculatedas‘0’,
— in step (b) the figure for potential future credit exposure for all
contractsincludedinanettingagreementmaybereducedaccording
tothefollowingequation:
PCEred=0,4*PCEgross+0,6*NGR*PCEgross
where:— PCE
red= thereduced figureforpotential futurecredit expo-
sure for all contracts with a given counterparty
included in a legally valid bilateral netting agree-
ment,
— PCEgross= the sumof the figures for potential future credit
exposureforallcontractswithagivencounterparty
which are included in a legally valid bilateral
netting agreement and are calculated by multi-
plying their notional principal amounts by the
percentagessetoutinTable1,
— NGR = ‘net-to-grossratio’:atthediscretionofthecompe-
tentauthoritieseither:
(i) separate calculation: the quotient of the net
replacement cost for all contracts included in
a legally valid bilateral netting agreement
withagivencounterparty(numerator)andthe
gross replacement cost for all contracts2000L0012—EN—01.05.2004—003.001—65
▼B
included in a legally valid bilateral netting
agreement with that counterparty (denomi-
nator),or
(ii) aggregate calculation: the quotient of the sum
of the net replacement cost calculated on a
bilateral basis for all counterparties taking
into account the contracts included in legally
valid netting agreements (numerator) and the
gross replacement cost for all contracts
included in legally valid netting agreements
(denominator).
If Member States permit credit institutions a
choice of methods, the method chosen is to be
usedconsistently.
For the calculation of the potential future credit exposure according to
the above formula perfectly matching contracts included in the netting
agreement may be taken into account as a single contract with a
notional principal equivalent to the net receipts. Perfectly matching
contractsareforwardforeign-exchangecontractsorsimilarcontractsin
whichanotionalprincipalisequivalenttocashflowsifthecashflows
falldueonthesamevaluedateandfullyorpartlyinthesamecurrency.
Intheapplicationofmethod2,instep(a)
— perfectly matchingcontracts included inthenetting agreement may
be taken into account as a single contract with a notional principal
equivalent to the net receipts, the notional principal amounts are
multipliedbythepercentagesgiveninTable2,
— for all other contracts included in a netting agreement, the percen-
tagesapplicablemaybereducedasindicatedinTable3:
TABLE3
Originalmaturity(1) Interest-ratecontractsForeign-exchange
contracts
Oneyearorless 0,35% 1,50%
Morethanoneyearbutnotmorethantwoyears 0,75% 3,75%
Additionalallowanceforeachadditionalyear 0,75% 2,25%
(1) Inthecaseofinterest-ratecontracts,creditinstitutionsmay,subjecttotheconsentoftheircompetentauthorities,
chooseeitheroriginalorresidualmaturity.2000L0012—EN—01.05.2004—003.001—66
▼B
ANNEX IV
TYPESOFOFF-BALANCE-SHEETITEMS
1.Interest-ratecontracts:
(a) single-currencyinterestrateswaps;
(b) basis-swaps;
(c) forwardrateagreements;
(d) interest-ratefutures;(e) interest-rateoptionspurchased;
(f) othercontractsofsimilarnature.
2.Foreign-exchangecontractsandcontractsconcerninggold:
(a) cross-currencyinterest-rateswaps;
(b) forwardforeign-exchangecontracts;(c) currencyfutures;
(d) currencyoptionspurchased;
(e) othercontractsofasimilarnature;(f) contractsconcerninggoldofanaturesimilarto(a)to(e).
3.Contractsofanaturesimilartothoseinpoints1(a)to(e)and2(a)to(d)
concerningotherreference itemsorindicesconcerning:
(a) equities;
(b) preciousmetalsexceptgold;
(c) commoditiesotherthanpreciousmetals;
(d) othercontractsofasimilarnature.2000L0012—EN—01.05.2004—003.001—67
▼B
ANNEX V
PARTA
REPEALED DIRECTIVES TOGETHER WITH THEIR SUCCESSIVE
AMENDMENTS
(referred toinArticle67)
CouncilDirective73/183/EEC
CouncilDirective77/780/EEC
CouncilDirective85/345/EECCouncilDirective86/137/EECCouncilDirective86/524/EEC
CouncilDirective89/646/EEC
Directive95/26/ECoftheEuropeanParliamentandoftheCouncil,
only Article 1, first indent, Article 2(1), first indent and (2), first
indent,Article 3(2),Article4(2),(3)and(4),asregardsreferences to
Directive77/780/EEC,and(6),andArticle5,firstindent
CouncilDirective96/13/EC
Directive98/33/ECoftheEuropeanParliamentandoftheCouncil
CouncilDirective89/299/EEC
CouncilDirective91/633/EEC
CouncilDirective92/16/EEC
CouncilDirective92/30/EEC
CouncilDirective89/646/EEC
CouncilDirective92/30/EEC
Directive95/26/ECoftheEuropeanParliamentandoftheCouncil
onlyArticle1,firstindent
CouncilDirective89/647/EEC
CommissionDirective91/31/EEC
CouncilDirective92/30/EECCommissionDirective94/7/EC
CommissionDirective95/15/EC
CommissionDirective95/67/ECDirective96/10/ECoftheEuropeanParliamentandoftheCouncilDirective98/32/ECoftheEuropeanParliamentandoftheCouncil
Directive98/33/ECoftheEuropeanParliamentandoftheCouncil(Article
2)
CouncilDirective92/30/EEC
CouncilDirective92/121/EEC2000L0012—EN—01.05.2004—003.001—68
▼B
PARTB
DEADLINESFORIMPLEMENTATION
(referred toinArticle67)
DirectiveDeadlinefor
implementa-
tion
73/183/EEC(OJL194,16.7.1973,p.1) 2.1.1975(1)
77/780/EEC(OJL322,17.12.1977,p.30) 15.12.1979
85/345/EEC(OJL183,16.7.1985,p.19) 15.7.198586/137/EEC(OJL106,23.4.1986,p.35) —
86/524/EEC(OJL309,4.11.1986,p.15) 31.12.1986
89/299/EEC(OJL124,5.5.1989,p.16) 1.1.199389/646/EEC(OJL386,30.12.1989,p.1) Article6(2), 1.1.1990
otherprovisions 1.1.1993
89/647/EEC(OJL386,30.12.1989,p.14) 1.1.199191/31/EEC(OJL17,23.1.1991,p.20) 31.3.1991
91/633/EEC(OJL339,11.12.1991,p.16) 31.12.1992
92/16/EEC(OJL75,31.3.1992,p.48) 31.12.199292/30/EEC(OJL110,28.4.1992,p.52) 31.12.1992
92/121/EEC(OJL29,5.2.1993,p.1) 31.12.1993
94/7/EC(OJL89,6.4.1994,p.17) 25.11.199495/15/EC(OJL125,8.6.1995,p.23) 30.9.1995
95/26/EC(OJL168,18.7.1995,p.7) 18.7.1996
95/67/EC(OJL314,28.12.1995,p.72) 1.7.199696/10/EC(OJL85,3.4.1996,p.17) 30.6.1996
96/13/EC(OJL66,16.3.1996,p.15) 15.4.1996
98/32/EC(OJL204,21.7.1998,p.26) 21.7.200098/33/EC(OJL204,21.7.1998,p.29) 21.7.2000
(1) However,asregardstheabolitionoftherestrictionreferredtoinArticle3(2)(g),theNetherlandswasallowedto
deferimplementationuntil2July1977.(See:Article8,secondsubparagraphofDirective73/183/EEC).2000L0012—EN—01.05.2004—003.001—69
ANΝΕΧVI
CORRELATIONTABLE
ThisDirective Directive77/780/EEC Directive89/299/EEC Directive89/646/EEC Directive89/647/EEC Directive92/30/EEC Directive92/121/EEC D irective96/10/EC
Article1(1) Article1,firstindent Article1,firstindent Article1(a)
Article1(2) Article1,second
indent
Article1(3) Article1(3)
Article1(4)to(8) Article1(5)to(9)
Article1(9) Article1,sixth
indent
Article1(10)and(11) Article1(10)and
(11)
Article1(12) Article1(12) Article1,seventh
indentArticle1(c)
Article1(13) Article1(13) Article1,eighth
indentArticle1(d)
Article1(14)to(17) Article2(1),second
tofifthindents
Article1(18)to(20) Article2(1),sixthto
eighthindents
Article1(21)to(23) Article1,thirdto
fifthindents
Article1(24) Article1(h)
Article1(25) Article1(m)
Article1(26) Article1,fifthindent
Article1(27) Article2(1),ninth
indent
Article2(1) Article2(1) Article2(1) Article1(1)
Article2(2) Article2
Article2(3) Article2(2)▼B2000L0012—EN—01.05.2004—003.001—70
ThisDirective Directive77/780/EEC Directive89/299/EEC Directive89/646/EEC Directive89/647/EEC Directive92/30/EEC Directive92/121/EEC D irective96/10/EC
Article2(4) Article2(3)
Article2(5),first,
secondandthird
subparagraphArticle2(4)(a),(b)
and(c)
Article2(6) Article2(3) Article1(3) Article2(2)(b)
Article3 Article3
Article4 Article3(1)
Article5(1),first
subparagraphArticle3(2),first
subparagraphArticle4(1)
Article5(1),second
subparagraphArticle10(1),third
subparagraph
Article5(2) Article4(2),intro-
ductorysentence,(a),
(b)and(c)
Article5(3)to(7) Article10(1)to(5)
Article6(1) Article3(2),first
subparagraph,third
indentandsecond
subparagraph
Article6(2) Article3(2)a
Article7(1)and(2) Article1(10),second
subparagraphand
Article5(1)and(2)
Article7(3) Article3(2)third,
fourthandfifth
subparagraphs
Article8 Article3(4)
Article9 Article3(3)(a)
Article10 Article3(6)
Article11 Article3(7)
Article12 Article7
Article13 Article6(1)
Article14(1) Article8(1)
Article14(2) Article8(5)▼B2000L0012—EN—01.05.2004—003.001—71
ThisDirective Directive77/780/EEC Directive89/299/EEC Directive89/646/EEC Directive89/647/EEC Directive92/30/EEC Directive92/121/EEC D irective96/10/EC
Article15 Article5
Article16(1)to(5) Article11(1)to(5)Article16(6) Article1(10),second
subparagraph
Article17 Article13(2)Article18 Article18(1)
Article19 Article18(2)
Article20(1)to(6) Article19Article20(7) Article23(1)
Article21(1)and(2) Article20
Article21(3) Article23(2)Article22 Article21
Article23(1) Article8
Article23(2)to(7) Article9Article24 Article9Article25 Article8
Article26 Article13(1)and(3)
Article27 Article14(2)Article28 Article7(1)
Article29 Article15
Article30(1)to(5) Article12(1)to(5)Article30(6) Article12(5a)Article30(7) Article12(5b)
Article30(8) Article12(6)
Article30(9) Article12(7)Article30(10) Article12(8)
Article31 Article12a
Article32 Article17Article33 Article13▼B2000L0012—EN—01.05.2004—003.001—72
ThisDirective Directive77/780/EEC Directive89/299/EEC Directive89/646/EEC Directive89/647/EEC Directive92/30/EEC Directive92/121/EEC D irective96/10/EC
Article34(1) Article1(1)
Article34(2)to(4) Article2(1)to(3)
Article35 Article3
Article36 Article4
Article37 Article5
Article38 Article6(1)and(4)
Article39 Article7
Article40 Article3(1)to(4),
(7)and(8)
Article41 Article4
Article42 Article5
Article43 Article6
Article44 Article7
Article45 Article8
Article46 Article2(2)
Article47 Article10
Article48 Article3
Article49 Article4(1)to(7)(r),
secondsubparagraph,
firstsentence,and
(7)(s)to(12)
Article50 Article5(1)to(3)
Article51(1)to(5) Article12(1)to(5)
Article51(6) Article12(8)
Article52(1)to(7) Article3(1)to(7)
Article52(8)and(9) Article3(5)and(6) Article3(8)and(9) Article5(4)and(5)
Article52(10) Article3(10)
Article53 Article4
Article54 Article5
Article55 Article6▼B2000L0012—EN—01.05.2004—003.001—73
ThisDirective Directive77/780/EEC Directive89/299/EEC Directive89/646/EEC Directive89/647/EEC Directive92/30/EEC Directive92/121/EEC D irective96/10/EC
Article56 Article7
Article57 Article11
Article58 Article3(5)
Article59 Article6
Article60 Article8 Article22 Article9 Article7
Article61 Article4a
Article62(1)and(2) Article11(4)and(5)
Article62(3) Article2
Article63 Article11(1)to(3)
Article64 Article6(1)to(9)
Article65 Article12(7)
Article66 Article14(2) Article9(2) Article24(3) Article12(2)
Article67 — — — — — — —
Article68 — — — — — — —
Article69 — — — — — — —
AnnexI Annex
AnnexII AnnexI
AnnexIII AnnexII
AnnexIV AnnexIII
AnnexV — — — — — — —
AnnexVI — — — — — — —▼B2000L0012—EN—01.05.2004—003.001—74