24th March 2017

BBA response to the EBA’s Consultation Paper on Draft Guidelines on Supervision of Significant Branches (EBA/CP/2016/24)

EBA’s consultation on co-ordination of supervision of Significant Branches EU and EEA banks within the EU/EEA between Host, Home and Consolidating supervisor. The BBA is overall supportive of the proposal as in principle it provides a co-ordinated way to manage supervision of significant branches, better separation of responsibilities between different supervisors, an improvement in how resolution is approached for Significant Branches and for a rationalisation of reporting and overall regulatory burden faced by firms operating across borders through branches. However we observe that the proposed guidelines could benefit from: (a) a clear parameter based framework for defining whether a branch is a Significant Plus, (b) an explicit statements that branches of non-EU firms are out of scope (and that for SSM firms ECB is both Home and Host supervisor), (c) mandatory reciprocity by Home/Consolidating/other Host supervisor for a firm’s activities in the initiating host’s market/country, (d) elements of a firm’s group recovery/resolution plan that concern a Significant Plus branch (including provision of any shared services in a sustainable manner) being subject to joint approval by the Home and Host supervisor. As non-EU/EEA financial institutions sometimes operate significant branches in EU/EEA jurisdictions (and vice versa) we also recommend that EBA considers an approach allowing for co-ordination between Member and non-Member  state based Host Consolidating and Home supervisors.

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