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European Union -
Financial Conglomerates Directive
DIRECTIVE 2002/87/EC OF THE
EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 December 2002 on the
supplementary supervision of credit institutions, insurance
undertakings and investment firms in a financial conglomerate and
amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC,
92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and
2000/12/EC of the European Parliament and of the Council
THE EUROPEAN
PARLIAMENT AND THE COUNCIL OF THE EUROPEAN
UNION,
Having regard to the Treaty
establishing the European Community, and in particular Article
47(2) thereof,
Having regard to the proposal from
the Commission,
Having regard to the opinion of the
Economic and Social Committee,
After consulting the Committee of
the Regions,
Having regard to the opinion of the
European Central Bank,
Acting in accordance with the
procedure laid down in Article 251 of the Treaty,
Whereas:
(1) The current Community
legislation provides for a comprehensive set of rules on the
prudential supervision of credit institutions, insurance
undertakings and investment firms on a stand alone basis and
credit institutions, insurance undertakings and investment firms
which are part of respectively a banking/investment firm group or
an insurance group, i.e. groups with homogeneous
financial activities.
(2) New developments in financial
markets have led to the creation of financial groups which provide
services and products in different sectors of the financial
markets, called financial conglomerates.
Until now, there has been no form
of prudential supervision on a group-wide basis of credit
institutions, insurance undertakings and investment firms which
are part of such a conglomerate, in particular as regards the
solvency position and risk concentration at the level of the
conglomerate, the intra-group transactions, the internal risk
management processes at conglomerate level, and the fit and proper
character of the management.
Some of these conglomerates are
among the biggest financial groups which are active in the
financial markets and provide services on a global basis.
If such conglomerates, and in
particular credit institutions, insurance undertakings and
investment firms which are part of such a conglomerate, were to
face financial difficulties, these could seriously destabilise the
financial system and affect individual depositors, insurance
policy holders and investors.
(3) The Commission Action Plan for
Financial Services identifies a series of actions which are needed
to complete the Single Market in Financial Services, and announces
the development of supplementary prudential legislation for
financial conglomerates which will address loopholes in the
present sectoral legislation and additional prudential risks to
ensure sound supervisory arrangements with regard to financial
groups with cross-sectoral financial activities. Such an ambitious
objective can only be attained in stages.
The establishment of the
supplementary supervision of credit institutions, insurance
undertakings and investment firms in a financial conglomerate is
one such stage.
(4) Other international forums have
also identified the need for the development of appropriate
supervisory concepts with regard to financial conglomerates.
(5) In order to be effective, the
supplementary supervision of credit institutions, insurance
undertakings and investment firms in a financial conglomerate
should be applied to all such conglomerates, the cross-sectoral
financial activities of which are significant, which is the case
when certain thresholds are reached, no matter how they are
structured.
Supplementary supervision should
cover all financial activities identified by the sectoral
financial legislation and all entities principally engaged in such
activities should be included in the scope of the supplementary
supervision, including asset management companies.
(6) Decisions not to include a
particular entity in the scope of supplementary supervision should
be taken, bearing in mind inter alia whether or not such entity is
included in the group-wide supervision under sectoral rules.
(7) The competent authorities
should be able to assess at a group-wide level the financial
situation of credit institutions, insurance undertakings and
investment firms which are part of a financial conglomerate, in
particular as regards solvency (including the elimination of multiple gearing of own funds
instruments), risk concentration and intra-group transactions.
(8) Financial conglomerates are
often managed on a business-line basis which does not fully
coincide with the conglomerate's legal structures. In order to
take account of this trend, the requirements for management should
be further extended, in particular as regards the management of
the mixed financial holding company.
(9) All financial conglomerates
subject to supplementary supervision should have a coordinator
appointed from among the competent authorities involved.
(10) The tasks of the coordinator
should not affect the tasks and responsibilities of the competent
authorities as provided for by the sectoral rules.
(11) The competent authorities
involved, and especially the coordinator, should have the means of
obtaining from the entities within a financial conglomerate, or
from other competent authorities, the information necessary for
the performance of their supplementary supervision.
(12) There is a pressing need for
increased collaboration between authorities responsible for the
supervision of credit institutions, insurance undertakings and
investment firms, including the development of ad hoc cooperation
arrangements between the authorities involved in the supervision
of entities belonging to the same financial conglomerate.
(13) Credit institutions, insurance
undertakings and investment firms which have their head office in
the Community can be part of a financial conglomerate, the head of
which is outside the Community.
These regulated entities should
also be subject to equivalent and appropriate supplementary
supervisory arrangements which achieve objectives and results
similar to those pursued by the provisions of this Directive. To
this end, transparency of rules and exchange of information with
third-country authorities on all relevant circumstances are of
great importance.
(14) Equivalent and appropriate
supplementary supervisory arrangements can only be assumed to
exist if the third-country supervisory authorities have agreed to
cooperate with the competent authorities concerned on the means
and objectives of exercising supplementary supervision of the
regulated entities of a financial conglomerate.
(15) This Directive does not
require the disclosure by competent authorities to a financial
conglomerates committee of information which is subject to an
obligation of confidentiality under this Directive or other
sectoral directives.
(16) Since the objective of the
proposed action, namely the establishment of rules on the
supplementary supervision of credit institutions, insurance
undertakings and investment firms in a financial conglomerate,
cannot be sufficiently achieved by the Member States and can
therefore, by reason of the scale and the effects of the action,
be better achieved at Community level, the Community may adopt
measures, in accordance with the principle of subsidiarity as set
out in Article 5 of the Treaty.
In accordance with the principle of
proportionality, as set out in that Article, this Directive does
not go beyond what is necessary in order to achieve this
objective. Since this Directive defines minimum standards, Member
States may lay down stricter rules.
(17) This Directive respects the
fundamental rights and observes the principles recognised in
particular by the Charter of Fundamental Rights of the European
Union.
(18) The measures necessary for the
implementation of this Directive should be adopted in accordance
with Council Decision 1999/468/EC of 28 June 1999 laying down the
procedures for the exercise of implementing powers conferred on
the Commission (1).
(19) Technical guidance and
implementing measures for the rules laid down in this Directive
may from time to time be necessary to take account of new
developments on financial markets. The Commission should
accordingly be empowered to adopt implementing measures, provided
that these do not modify the essential elements of this Directive.
(20) The existing sectoral rules
for credit institutions, insurance undertakings and investment
firms should be supplemented to a minimum level, in particular to
avoid regulatory arbitrage between the sectoral rules and those
for financial conglomerates.
Therefore, First Council Directive
73/239/EEC of 24 July 1973 on the coordination of laws,
regulations and administrative provisions relating to the taking
up and pursuit of the business of direct insurance other than life
assurance (1),
First Council Directive 79/267/EEC
of 5 March 1979 on the coordination of laws, regulations and
administrative provisions relating to the taking up and pursuit of
the business of direct life assurance (2),
Council Directive 92/49/EEC of 18
June 1992 on the coordination of laws, regulations and
administrative provisions relating to direct insurance other than
life insurance (third non-life insurance Directive) (3),
Council Directive 92/96/EEC of 10 November 1992 on the
coordination of laws, regulations and administrative provisions
relating to direct life assurance (third life insurance Directive)
(4),
Council Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investments firms and credit
institutions (5)
and Council Directive 93/22/EEC of
10 May 1993 on investment services in the securities field (6),
as well as Directive 98/78/EC of
the European Parliament and of the Council of 27 October 1998 on
the supplementary supervision of insurance undertakings in an
insurance group (7)
and Directive 2000/12/EC of the
European Parliament and of the Council of 20 March 2000 relating
to the taking up and pursuit of the business of credit
institutions (8)
should be amended accordingly. The
objective of further harmonisation can, however, only be achieved
by stages and needs to be based on careful analysis.
(21) In order to assess the need
for and prepare any possible future harmonisation of the treatment
of asset management companies under sectoral rules, the Commission
should report on Member States' practices in this field,
(1) OJ L 228, 16.8.1973, p. 3. Directive as last amended by Directive 2002/13/EC of the European Parliament and of the Council (OJ L 77, 20.3.2002, p. 17). (2) OJ L 63, 13.3.1979, p. 1. Directive as last amended by Directive 2002/12/EC of the European Parliament and of the Council (OJ L 77, 20.3.2002, p. 11). (3) OJ L 228, 11.8.1992, p. 1. Directive as last amended by Directive 2000/64/EC of the European Parliament and of the Council (OJ L 290, 17.11.2000, p. 27). (4) OJ L 360, 9.12.1992, p. 1. Directive as last amended by Directive 2000/64/EC. (5) OJ L 141, 11.6.1993, p. 1. Directive as last amended by Directive 98/33/EC of the European Parliament and of the Council (OJ L 204, 21.7.1998, p. 29). (6) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2000/64/EC. (7) OJ L 330, 5.12.1998, p. 1. (8) OJ L 126, 26.5.2000, p. 1. Directive as amended by Directive 2000/28/EC (OJ L 275, 27.10.2000, p. 37). HAVE ADOPTED THIS DIRECTIVE: |
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