NoC229/10 OfficialJournaloftheEuropeanCommunities 25.8.93
II
(PreparatoryActs)
COMMISSION
ProposalforaCouncilDirectiveamendingDirectives77/780/EECand89/646/EECinthe
fieldofcreditinstitutions,73/239/EECand92/49/EECinthefieldofnon-lifeinsurance,
79/267/EECand92/96/EECinthefieldoflifeassurance,and93/22/EECinthefieldof
investmentfirmsinordertoreinforceprudentialsupervision
(93/C229/07)
COM(93)363final—SYN468
(SubmittedbytheCommissionon28July1993)
THECOUNCILOFTHEEUROPEANCOMMUNITIES ,WhereastheFirstCouncilDirective79/267/EEC(5),
andinparticularasamendedbytheThirdCouncil
Directive92/96/EEC(6),onthecoordinationoflaws,
regulationsandadministrative provisionsrelatingtothe
taking-upandpursuitofthebusinessofdirectlife
assurancelaysdowntheauthorizationrequirementsfor
assuranceundertakings inthefieldofdirectlife
assurance ;HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularthefirstand
thirdsentencesofArticle57(2)thereof,
HavingregardtotheproposalfromtheCommission ,
WhereasCouncilDirective93/22/EEC(7)oninvestment
servicesinthesecuritiesfieldlaysdowntheauthori­
zationrequirementsforinvestmentfirms;IncooperationwiththeEuropeanParliament,
HavingregardtotheopinionoftheEconomicand
SocialCommittee,Whereastheneedforthereinforcement ofcompetent
authorities'powersentailsamendmentoftheexisting
Directivesinthesectorsconcerned;whereasabinding
CommunityDirectiveisthesoleappropriatemeansof
meetingthisneed;whereasthismeasurerestrictsitselfto
theminimumrequiredtoachievethedesiredobjective
andisaccordinglyproportionalthereto;WherastheFirstCouncilDirective77/780/EEC(')and
theSecondCouncilDirective89/646/EEC(2)onthe
coordinationoflaws,regulationsandadministrative
provisionsrelatingtothetakingupandpursuitofthe
businessofcreditinstitutionslaydowntheauthorization
requirementsforcreditinstitutions; WhereasthisDirectivehasbeenthesubjectofconsul­
tationwiththeBankingAdvisoryCommittee,whichwas
setupbyDirective77/780/EEC,andtheInsurance
CommitteewhichwassetupbyCouncilDirective
91/675/EEC(8); WhereastheFirstCouncilDirective73/239/EEC(3),
andinparticularasamendedbytheThirdCouncil
Directive92/49/EEC(4),onthecoordinationoflaws,
regulationsandadministrative provisionsrelatingtothe
takingupandpursuitofthebusinessofdirectinsurance
undertakingsotherthanlifeassurancelaydownthe
authorizationrequirementsforinsuranceundertakingsin
thefieldofdirectnon-lifeinsurance;WhereastheclosingdownoftheBankofCreditand
CommerceInternational (BCCI)andothereventshave
givenrisetotheneedtostrengthenthepowersofthe
competentauthoritiesforthesupervisionofcredit
(5)OJNoL63,13.3.1979,p.1. OOJNoL322,17.12.1977,p.30.
oOJNoL386,30.12.1989,p.1.
(3)OJNoL228,16.8.1973,p.3.
(4)OJNoL228,11.8.1992,p.1.(6)OJNoL360,9.12.1992,p.1.
OOJNoL141,11.6.1993,p.27.
(8)OJNoL374,31.12.1991,p.32

25.8.93 OfficialJournaloftheEuropeanCommunities NoC229/11
institutionsintheMemberStates;whereasitisdesirable
toadoptsimilarmeasuresinthewholefinancialservices
sector,includingthecompetentauthoritiesforthesuper­
visionofinsuranceundertakingsandinvestmentfirms;officeislocatedinadifferentcountrythanitsregistered
office;whereasforthisreasontheheadofficeofacredit
institution,insuranceundertakingorinvestmentfirm
mustbelocatedinthesamecountryasthatofthe
registeredoffice;whereasDirective93/22/EECalready
laysdownthisrequirementforinvestmentfirms;
WhereasDirectives 77/780/EEC,89/646/EEC,
73/239/EEC,asamendedbyDirectives92/49/EEC,
79/267/EEC,asamendedbyDirectives92/96/EECand
93/22/EEC('theDirectives')laydowntheconditions
whichmustbefulfilledbeforeMemberStates'competent
authoritiesmaygrantauthorizationforthetaking-upof
business;whereastheseconditionsdonotincludethe
requirementthatwhereacreditinstitution,insurance
undertakingorinvestmentfirmsbelongstoagroup,the
groupstructuremustbesufficientlytransparentinorder
toalloweffectivesupervision ;WhereasDirectives 89/646/EEC,92/49/EEC,
92/96/EECand93/22/EECalreadyprovidefora
restrictedlistofbodiestowhominformationmaybe
passedonbythecompetentauthorities;whereasinorder
tomaintainconfidentiality thelistofrecipientsofinfor­
mationshouldremainnarrowlylimited;whereas,
however,inthelightoftheBCCIaffairandotherevents
itisconsidereddesirabletoincludeinthatnarrowlist
certainbodieswhichplayakeyrolewheninvestigations
intoacreditinstitution,aninsuranceundertakingoran
investmentfirmmightbenecessaryinordertosupport
thesupervisoryobjectives; WhereastheDirectivesshouldthereforerequire
applicationsforauthorization tocontainsufficiently
detailedinformationtoallowthecompetentauthorities
toassesswhethereffectivesupervisioncanbeexercised
inpractice;WhereasDirectives 89/646/EEC,92/49/EEC,
92/96/EECand93/22/EECgiveprovisionsforthe
exchangeofconfidentialinformationbetweenthe
competentauthoritiesandpersonsresponsiblefor
carryingoutstatutoryauditsoftheaccountsofcredit
institutions,insuranceundertakings andinvestment
firms;whereas,duetoauditors'accesstomaterial
essentialtocreditinstitutions',insuranceundertakings'
andinvestmentfirms'fulfilmentoftheirobligations,and
intheinterestofprotectingthedepositors,policyholders
andinvestors,theauditorsshouldbeobligedtopasson
certainrelevantinformationtothecompetentauth­
orities;whereasthisobligationshouldonlybetriggered
byanarrowlydefinedsetofcircumstances ;WhereasDirectives 89/646/EEC,92/49/EEC,
92/96/EECand93/22/EECalreadyprovideforinfor­
mationontheidentityofshareholdersorsimilarpersons
andoftheamountoftheholdingstobesubmittedtothe
competentauthoritiesandthatthesecompetentauth­
oritiesshallrefuseauthorization undercircumstances
whichdonotensurethesoundandprudent
management ;
Whereasinthecaseofacreditinstitution,insurance
undertakingorinvestmentfirmwithbranchesoperating
inmorethanonecountry,orwhichispartofagroupof
creditinstitutions,insuranceundertakingsorinvestment
firmswhichisestablishedinmorethanonecountry,itis
desirabletohaveasingleauditorfortheorganization
andcoordination oftheseperateauditswherever
possible;whereasitishowevernotappropriatetolaythis
downasanobligationinthisDirective;Whereas,inthecaseofexistingcreditinstitutions,
insuranceundertakingsandinvestmentfirmsitshouldbe
madeclearthatanymaterialchangeoftheconditions
underwhichthecomptentauthoritieshavegranteda
licenceshouldbecommunicated totheseauthoritiesfor
reconsideration inordertoreassesstheirfulfilmentwith
theregardtotheobjectivesoftheauthorization ;
whereastheDirectivesalreadyempowerthecompetent
authoritiestowithdrawanauthorization ifthe
conditionsunderwhichtheauthorization wasgranted
arenolongerfulfilled;whereasinthecasethatagroup
towhichanexistingcreditinstitution,insuranceunder­
takingorinvestmentfirmbelongsistransformedinsuch
awaythatitsfinancial,legalordecision-making
structure,oritsadministrative organizationlackstrans­
parencysothatitcannolongerbesupervisedeffectively,
thepresentmeasureswouldgivethenecessarypowersto
thesupervisoryauthoritiestowithdrawtheauthorization
grantedasanultimatesanction;Whereasitisdesirablethatthecompetentauthorities
havetherighttovetotheappointmentorreappointment
ofpersonsresponsibleforcarryingoutthestatutory
auditsofaccounts,forexampleiftheyhavefailedto
cooperatewiththecompetentauthoritiesoriftheyhave
otherwiseperformedunsatisfactorily fromthoseauth­
orities'pointofview;whereasinviewofthepresent
situationofMemberStates'lawsandregulations
concerningtherelationshipbetweencompetentauth­
orities,auditorsandshareholders ,itisnotappropriateto
provideforthisinthisDirective,Whereaseffectivesupervisionofacreditinstitution,
insuranceundertakingorinvestmentfirmcouldbe
hamperedifthecompetentauthoritiescannotmaintain
effectivecontactwiththemanagementbecauseitshead

NoC229/12 OfficialJournaloftheEuropeanCommunities 25.8.93
HASADOPTED THISDIRECTIVE :
Article1
Definition
—ToArticle1ofDirective77/780/EEC,anewfifth
indent,
—toArticle1ofDirective92/49/EEC,anewletter(1),
—toArticle1ofDirective92/96/EEC,anewletter
(m),and
—toArticle1ofDirective93/22/EEC,anewnumber
15,
shallbeaddedwhichreadsasfollows:
'"group"meansasituationwheretwoormore
undertakingsarelinkeddirectlyorindirectlybyway
of:
(a)"participation"whichshallmeantheownership,
directorindirect,of20%ormoreofthevoting
rightsorcapitalofanundertaking ;or
(b)"control"whichshallmeantherelationship
betweenaparentundertakingandasubsidiary,
asdefinedinArticle 1ofDirective
83/349/EEC(x),orasimilarrelationship
betweenanynaturalorlegalpersonandan
undertakinggroupmustbeprovidedincludingsufficientdetailson
thestructureofthegroupandproposedrelationships
betweenthefinancialundertakingandtheother
entitiesofthegrouptoallowthecompetentauth­
oritiestoassesswhetherthefinancialundertakingcan
besupervisedeffectively.'
3.—ToArticle8(1)ofDirective73/239/EEC,as
amendedbyDirective92/49/EEC,and
—toArticle8(1)ofDirective79/267/EEC,as
amendedbyDirective92/96/EEC,
anewparagraph 1(a)shallbeaddedwhichreadsas
follows:
'(a)Whereaninsuranceundertaking ispartofa
groupthecompetentauthoritiesshallsatisfy
themselvesthatthestructureofthegroupandin
particulartheproposedrelationshipsbetweenthe
insuranceundertakingandotherentitiesinthe
grouparesuchastoenabletheinsuranceunder­
takingtobesupervisedeffectively .Theinsurance
undertakingconcernedshallprovideinformation
aboutthestructuralorganizationofthegroup
includingsufficientdetailsonthestructureofthe
groupandproposedrelationshipsbetweenthe
insuranceundertakingandtheotherentitiesof
thegroup.'
4.(a)—ToArticle3ofDirective77/780/EEC,and
—toArticle3ofDirective93/22/EEC,
anewparagraph8shallbeaddedwhichreadsas
follows:
'8.MemberStatesshallrequirethatafinancial
undertakingshallnotifytothecompetentauth­
orities:
—whenitbecomespartofagroup,
—whenthestructureofthegrouptowhichit
belongschanges;
underthesecircumstancesparagraph4applies.'
(b)—ToArticle8ofDirective73/239/EEC,as
amendedbyDirective92/49/EEC,and
—toArticle8ofDirective79/267/EEC,as
amendedbyDirective92/96/EEC,
anewparagraph5shallbeaddedwhichreadsas
follows:
'5.MemberStatesshallrequirethatafinancial
undertakingshallnotifytothecompetentauth­
orities:
—whenitbecomespartofagroup,0)OJNoL193,18.7.1983,p.1.'
Article2
Groupstructures
1.—ToArticle3(2)ofDirective77/780/EEC,a
fourthindent,and
—toArticle3(3)ofDirective92/22/EEC,athird
indent,
shallbeaddedwhichreadsasfollows:
'—whereafinancialundertakingispartofagroup,
thecompetentauthoritiesmustsatisfythemselves
thatthestructureofthegroupandinparticular
theproposedrelationshipsbetweenthefinancial
undertakingandotherentitiesinthegroupare
suchastoenablethefinancialundertakingtobe
supervisedeffectively.'
2.—ToArticle3(4)ofDirective77/780/EEC,after
thefirstsentence,and
—toArticle3(4)ofDirective93/22/EEC,afterthe
firstsentence,
thefollowingsentenceshallbeaddedwhichreadsas
follows:
'Whereafinancialundertaking ispartofagroup,
informationaboutthestructuralorganizationofthe

25.8.93 OfficialJournaloftheEuropeanCommunities NoC229/13
gationsofshareholdersandofmembersof
theadministrative ,managerialandsuper­
visorybodiesofcompanies,andtotake-over
bidsandthepersonsappointedbysuch
responsiblebodiestocarryoutspecifictasks.'
2.—ToArticle12(5)ofDirective77/780/EEC,as.
amendedbyArticle16ofDirective89/646/EEC,
and
—toArticle25(5)(b)ofDirective93/22/EEC,
anewfifthindentshallbeaddedwhichreadsas
follows:
'—departmentsofcentralbanksorotherbodies
responsiblefortheoversightofpaymentsystems.'
3.ToArticle12(5)ofDirective77/780/EEC,as
amendedbyArticle16ofDirective89/646/EEC,a
newparagraph 8shallbeaddedwhichreadsas
follows:
£8.ThisArticleshallnotpreventthecompetent
authoritiesfromcommunicating theinformation
referredtoinparagraphs 1to4toaclearinghouseor
othersimilarbodyrecognizedundernationallawfor
theprovisionofclearingorsettlementservicestoone
ofitsmarketsiftheyconsiderthatitisnecessaryto
communicate theinformation inordertoensurethe
properfunctioningofthosebodiesinrelationto
defaultsorpotentialdefaultsonthemarket.The
informationreceivedshallbesubjecttotheconditions
ofprofessionalsecrecyimposedinparagraph 1.The
MemberStatesshall,however,ensurethatinfor­
mationreceivedunderparagraph2mayneverbe
disclosedinthecasesreferredtointhisparagraph
exceptwiththeexpressconsentofthecompetent
authoritieswhichdisclosedtheinformation.'—whenthestructureofthegrouptowhichit
belongschanges;
underthesecircumstances paragraph 1(a)
applies.'
Article3
Headofficeandregisteredoffice
—ToArticle3(2)ofDirective77/780/EEC,
—toArticle6(a)ofDirective73/239/EEC,as
amendedbyDirective92/49/EEC,and
—toArticle6(a)ofDirective79/267/EEC,as
amendedbyDirective92/96/EEC,
thefollowingindentshallbeaddedwhichreads:
'—theheadofficeofthefinancialundertakingmust
beinthesameMemberStateasitsregistered
officeandthatinwhichtheauthorization isbeing
requested.'
Article4
Exchangeofinformation
1.—Article12(5)ofDirective77/780/EEC,as
amendedbyArticle16ofDirective89/646/EEC,
—Article16(5)ofDirective92/49/EEC,
—Article15(5)ofDirective92/96/EEC,and
—Article25(5)(b)ofDirective93/22/EEC,
shallbeamendedasfollows:
(a)thesecondindentshallread:
'—bodiesinvolvedintheliquidationandbank­
ruptcyofthefinancialundertakingandin
othersimilarproceduresandtheauthorities
competenttosupervisesuchbodies,';
(b)thethirdindentshallread:
'—personsresponsibleforcarryingoutstatutory
auditsoftheaccountsofthefinancialunder­
takingandtheauthoritieswhichare
responsiblefortheapprovalofstatutory
auditors,';
(c)anewfourthindentshallbeaddedwhichreads:
'—bodiesresponsibleforthedetectionand
investigationofbreachesofcompanylaw,in
particularlawsrelatingtotherightsandobli­Article5
Roleofstatutoryauditors
—ToArticle12ofDirective77/780/EEC,asamended
byArticle16ofDirective89/646/EEC,anew
paragraph9,
—toArticle16ofDirective92/49/EECandArticle15
ofDirective92/96/EECanewparagraph7,and
—toArticle25ofDirective93/22/EEC,anew
paragraph10,
shallbeaddedwhichreadsasfollows:
'TheMemberStatesshallprovidethatanyperson
responsibleforcarryingoutstatutoryauditsofthe

OfficialJournaloftheEuropeanCommunities25.8.93 NoC229/14
accountsofthefinancialundertakingshallhavethe
dutytoreportimmediatelytothecompetentauth­
oritiesforprudentialsupervisionifinthecourseof
thiswork,hebecomesawareoffactswhicharelikely
toleadtoaseriousqualificationorrefusalofthe
certificateofaudit;endangertheexistenceofthe
financialundertaking ;orgravelyimpairitsdevel­
opmentorimperiltheprotectionofclients,orwhich
indicatethattheprinciplesofsoundmanagement
havebeenseriouslyviolated.'Theseprovisionsshallenterintoforcenolaterthan31
December1995.TheMemberStatesshallforthwith
informtheCommissionthereof.
Article7
Wheneverthewords'financialundertaking'areusedin
theDirectivetheyshallbereplacedby:
—'creditinstitution'whenthisDirectiveamends
Directives77/780/EECand89/646/EEC,
—'insuranceundertaking'whenthisDirectiveamends
Directives73/239/EEC,92/49/EEC,79/267/EEC
and92/96/EEC,
—'investment firm'whenthisDirectiveamends
Directive93/22/EEC.
Article8
ThisDirectiveisaddressedtotheMemberStates.Article6
Finalprovisions
Nolaterthan1July1995MemberStatesshalladoptthe
laws,regulationsandadministrative provisionsnecessary
forthemtocomplywiththisDirective.