Question ID
2015_1786
Legal act
Directive 2014/59/EU (BRRD)
Topic
Cross-border resolution
Article
96
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n.a.
Type of submitter
Competent authority
Subject matter
Resolution powers in relation to third country branches
Question

Article 96 of Directive 2014/59/EU (BRRD) requires Member States to ensure resolution authorities have the powers necessary to act in relation to a third country branch. How can Member States comply with this requirement? What specific actions should the resolution authority be empowered to take in relation to a third country branch? How can a resolution authority take action against a branch given it is not a legal entity?

Background on the question

The BRRD is not specific in terms of what actions a resolution authority can take with regard to a third country branch in addition as a third country branch is not a legal entity we would appreciate some clarification around Article 96 of the BRRD.

Submission date
Final publishing date
Final answer

Article 1 of Directive 2014/59/EU (BRRD) defines the scope of the BRRD as including "branches of institutions that are established outside the Union in accordance with the specific conditions laid down in this Directive" (Union branches).                                                                         

The requirement as to the actions that authorities should be able to take as regards these branches is defined in a broad manner in the BRRD. More concretely, Articles 94(4)(a) (i) and (ii) of the BRRD request that Member States equip their authorities with powers to enforce third country resolution proceedings by being able to exercise resolution tools over, respectively, "assets of third country institution or parent undertaking  that are located in their Member State or governed by the law of their Member State" and "rights or liabilities of a third-country institution that are booked by the Union branch in their Member State or governed by the law of their Member State, or where claims in relation to such rights and liabilities are enforceable in their Member State".

For Union branches that are not subject to third-country resolution proceedings or where the third-country resolution proceeding cannot be recognised, Article 96(3) applies, recalling principles and requirements that the authority should have regard to when taking action in so far as they are relevant.

Disclaimer:

This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

Status
Final Q&A
Answer prepared by
Answer prepared by the European Commission because it is a matter of interpretation of Union law.
Note to Q&A

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.