1. Process

Upon receipt of an application for authorisation to establish a TCB, competent authorities should send an acknowledgment of receipt to the applicant head undertaking.

Competent authorities should satisfy themselves that the notification is complete with all information and documents listed in Part I of these draft Guidelines and any other information or document requested under national law. For this purpose, competent authorities should request any missing information or document.

Upon an application being assessed as complete, following the receipt of the last piece of information or document, the competent authority should inform the applicant head undertaking that the application is complete, and of the start and end date of the assessment period.

In case of changes in the information submitted with the application, the applicant head undertaking should promptly inform the competent authority and submit the updated information.

The competent authority should inform the applicant head undertaking of the relevant milestones of the assessment procedure and should be able to request clarifications, including additional information, on the submitted application.

Competent authorities should finalise the assessment within 6 months from the start of the assessment period or in any case within the 12 months from the receipt of the application. In this context, and in accordance with Article 117 of Directve 2013/36/EU, competent authorities should cooperate with the competent authorities of other entities of the same third-country group subject to that Directive.

Competent authorities should consult and exchange information with the third-country competent authority or authorities responsible for the prudential supervision of the head undertaking(s).

Where the statement of non-opposition by the third-country competent authority(ies) set out in Part I, Section 1, paragraph (2), point (g) of these draft Guidelines is not submitted by the applicant head undertaking in the application due to justified reasons, competent authorities should contact the third country-authority of the applicant, intermediate and ultimate parent head undertaking as applicable, to obtain confirmation in writing that there are no grounds to oppose the establishment of the TCB.

The consultation between competent authorities and AML/CFT competent authority of the Member State where the application for the establishment of the TCB has been submitted (Article 48c(5) CRD), should take place in accordance with the EBA guidelines on cooperation between competent authorities and AML/CFT supervisors and FIUs³² .

32 https://eba.europa.eu/sites/default/files/document_library/Publications/Guidelines/2021/EBA-GL-2021-15%20GL%20on%20CFT%20cooperation/1025384/Final%20AML-CFT%20Cooperation%20Guidelines.pdf

Considering the complexity of the application due to the different applicable laws, applicant head undertakings are encouraged to contact the competent authority prior the submission of the application. Annex I

Draft Letter to the third-country authority on the compliance of head undertaking and/or its group with prudential requirements

Date: FROM : Name of the competent authority Department/Unit Address: Name of the contact person: Telephone: Email:

TO : Name of the third-country competent authority of the applicant head undertaking: Department/Unit Address: Name of the contact person Telephone: Email:

Re: application of [ name of the applicant head undertaking ] to establish a third-country

Dear Sir/Madam:

We contact you in relation to the application for authorisation to establish a third-country branch in [ Member State ] submitted by [ name of applicant head undertaking ] on [ date of receipt of application ]

For purposes of the assessment of the application, we seek your confirmation that based on the prudential situation of the applicant head undertaking on an individual basis/ intermediate head undertaking on a sub-consolidated basis/ ultimate parent undertaking on a consolidated basis [ please select the appropriate ] you have no grounds to oppose the establishment of the third-country branch in [name of the Member State ] and that the [ name of the applicant/intermediate/ultimate parent head undertaking - please select the appropriate ] will be able to comply with the applicable prudential requirements for at least the 12 months following the issuance of the authorisation.

Such statement of non-opposition to the establishment of the third-country branch should be based in particular on³³ :

33 Where the applicant head undertaking is an undertaking and not a credit institution established in a third country, the third-country authority should take into account the specified requirements to the extent applicable to the applicant head undertaking in the third country.

• - the compliance with own funds, own funds requirements, LCR, NSFR and leverage ratio requirement, as applicable,
• - the adequacy of the organisational, administrative and accounting structures, and

the good repute of a) the applicant/intermediate/ultimate parent head undertaking [ please select the appropriate ], b) of the members of their respective management body and c) their controlling shareholders and ultimate beneficial owners. Such assessment should consider any breach of laws or regulations that are relevant for the prudential framework of your jurisdiction such as violations of prudential regulations, insolvency, commercial crimes, conviction or involvement in money laundering and terrorist financing, occurred in the past ten years or other shorter period as applicable under third-country prudential law, including under pending procedure or investigation. Where relevant, specific information about any such conviction, breach of laws or regulation relevant for the prudential framework of your jurisdiction, as well as any pending procedures, investigations or involvements should be provided;

• - the submitted application that you have received from [ name of the head undertaking ] on [ date ].

Yours sincerely,

Name and last name

[ signature ]

Submission letter

Date: …………… Reference number: …………..

Name of the applicant head undertaking: Address: (Contact details of the designated contact person) Name: Telephone: Email:

This is an application for authorisation to the establishment of a third-country branch in accordance with Directive 2013/36/EU (the ‘Directive’ ).

We certify that the information provided in this application is true, accurate, complete and not misleading. Unless specifically stipulated otherwise, the information speaks as of the date of this application. Where certain information is expressed to speak as of a future date, this is specifically set out in the application, and we undertake to notify the authority in writing if any such information is not true, accurate and complete or is misleading as of the date specified in the application in respect of such information.

[Name of the applicant head undertaking] By: ………………….

Name and last name: Position

Template for submission of the application (The listed requirements intend to replicate the information listed in Part I of the Guidelines which prevails)

Table 1: Information about the identity of the applicant, intermediate and ultimate parent head undertaking (head undertaking) as per Section 1 of Part I of the Guidelines

1.1 Identification of the head undertaking. Please fill-in separate section for each relevant head undertaking Legal name, legal form, date and place of incorporation, website and any other communication channel used, of the applicant head undertaking Country and address of registered office, and of the administrative headquarter, if different. Name of the public register where the applicant head undertaking is registered and the registration number (where applicable) The Legal Entity Identifier (LEI), if any, of the applicant head undertaking (where available) 1.2 Contact person for the application within the head undertaking. Please fill-in separate section for each relevant head undertaking Name of the head undertaking Title Full name Position Telephone Mobile number Email

Please fill-in separate section for each relevant head undertaking) Name of the head undertaking Title Full name Position Telephone Mobile number Email 1.4 Person within the third-country competent authority in charge of the supervision of the head undertaking or, if different, of the relevant activities (please fill-in a separate section of the table for each relevant person) Title Full name Authority and organisational unit / name of the relevant head undertaking Position Telephone Mobile number Email 1.5 Additional information on the applicant head undertaking

• a) Confirmation that the core banking services the applicant head undertaking seeks authorisation for are covered by the authorisation in the third country; or
• b) where the activities of lending or the provision of guarantees or commitment are not subject to authorisation in the third country, confirmation that the applicant head undertaking carries out such core banking services in the third country and it is subject to prudential regulation and supervision for these activities in the third country. 1.6 Reasoned, third-party legal opinion on the absence of impediments in the third country’s framework of the applicant, intermediate and ultimate parent head undertaking, as applicable, precluding the ability of the TCB to comply with the EU and Member State legislation and regulation 1.7 Confirmation of the notification of the application and related documents by the applicant head undertaking to the third-country competent authority

2.1 Structure of the applicant head undertaking and its group Corporate chart of the group of the applicant head, including the intermediate and the ultimate parent head undertaking, and the geographic areas of establishment and of activity of the entities which are part of the TCG. Where the TCG has one or more EU subsidiaries which are financial sector

indication of the Member State and relevant authority and contact person. Where applicable, the chart should also indicate any ongoing

establishment of new subsidiaries and/or other new branches in the EU) which may significantly impact the prudential situation and the organisational structure of the applicant head undertaking 2.2 Identity of the members of the management body in management function of the applicant head undertaking, intermediate and ultimate parent undertaking, as specified below. With regard to the applicant head undertaking, please indicate the member of the management body who is the reporting line of the envisaged TCB. Please fill-in separate copy of this section of the table for each member each applicable head undertaking. Name and last name and, if different, name at birth Name of the head undertaking Place and date of birth Gender Country of residence and address Nationality Telephone number Mobile Email address Copy of passport, ID card or equivalent In case of member of the management body of the applicant Yes No head undertaking, please specify whether the person is the reporting line of the envisaged TCB 2.3 Chart of the capital structure of the applicant head undertaking with the identification of the direct controlling shareholders and of the ultimate beneficial owner(s) 2.4 A udited financial statements of the last three years of the applicant, intermediate and parent head undertaking on a solo and where applicable on consolidated basis, including a summary note describing the operations of the head undertaking(s) or its group 2.5 Where provided directly to the applicant head undertaking, statement of no opposition to the establishment of a TCB issued by the third country competent authority of the applicant head undertaking, of the intermediate and of the ultimate parent head undertaking, as applicable, covering all prudential elements relating to the good standing as well as the elements relevant to the reputation, listed in Part I, Section 1, point (g) of paragraph (2) of the Guidelines

Table 3: Programme of operations of the TCB: business plan as per Section 2 of Part I of the draft Guidelines

3.1 The application should contain all relevant information to categorise the envisaged TCB as class 1 or class 2 as per Article 48b(1) CRD 3.2 Business plan on a base case and a stress scenario basis, for the three years following access to the market of the TCB upon grant of the authorisation, including the following qualitative and quantitative information: Intended location of establishment and address of the TCB Estimated date at which business operations of the TCB are intended to commence The applicant head undertaking’s business rationale and business strategy for the establishment of the TCB and the consistency with its business plan List of planned activities, including description of the core banking services, of any other financial service requiring a license under national law, of the non-financial activities that the TCB intends to carry out, and the related risks, as well as the target customers Where the envisaged TCB plans to collect deposits from the public, confirmation by the applicant head undertaking to make the TCB become member of a deposit guarantee scheme of the Member State where the application has been submitted

forecast annual reports, the forecast financial statements (namely the balance sheet, the profit and loss accounts or income statements and, where available, the cash flow statements); Forecast calculation of any prudential ratio imposed by national law

Table 4: Programme of operation: Internal governance and risk management of the TCB as per Section 3 of Part I of the draft Guidelines

4.1 Chart of the planned TCB organisational structure accompanied by relevant explanations 4.2 Persons who will effectively direct the TCB, or members of the local management committee where applicable. Please complete a separate copy of the table for each person Name and last name and, if different, name at birth Gender Place and date of birth Country of residence and address Telephone number Mobile Email address Nationality Copy of passport, of the ID card or equivalent Information for the suitability assessment in accordance with Article 91 of CRD, as specified in the EBA RTS on information and documentation to carry out the suitability assessment of the members of the management body under article 91 of CRD³⁴ . Where available, most recent internal suitability assessment of each of the – at least two persons – who will effectively direct the TCB, or where applicable, of each member of the local management committee Description of the persons’ key duties and responsibilities Rules of procedure for the local management committee (where applicable) 4.3 Key function holders. Please complete a separate copy of row 4.2 above for each person to be assessed in accordance with applicable law. 4.3 Policies and procedure on internal control functions, i.e risk management, compliance, compliance and internal audit. Description of the reporting lines between the internal control functions and the persons effectively directing the TCB’s business and, where applicable, the local

34 The Consultation Paper is available at https://www.eba.europa.eu/publications-and-media/press-releases/eba-and-esma-launch-consultation-revised-suitability-assessment-framework-banks-and-investment-firms management committee, with the management body of the head undertaking Outline of the TCB’s credit risk policy and, where applicable, rules of procedure of the credit risk committee Outline of the TCB’s remuneration policy Description of the ICT strategy, including ICT risk management framework compliant with Regulation (EU) 2022/2554 on digital operational resilience for the financial sector Description of the third-party arrangements regarding the provision or the support of critical or important functions

important functions of the TCB are performed by its head undertaking Outline of the business continuity plan, and information on the coverage of the TCB by the recovery plan of the applicant head undertaking

Table 5: Programme of operations: information on AML/CFT requirements as per Section 4 of Part I of the draft Guidelines

5.1 Person responsible for the TCB’s compliance with AML/CFT requirements in the Member State in which it seeks authorisation Name and last name and, if different, name at birth Gender Place and date of birth Country of residence and address Nationality Copy of passport, ID card or equivalent 5.2 ML/TF Framework Business-wide ML/TF risk assessment of the TCB, having regard to the inherent risk factors relating to the nature and characteristics of its target customer bases, the products and services offered and distribution channels used Description of the TCB’s governance arrangements and resources dedicated to its AML/CFT compliance function and the applicant’s assessment of the adequacy of those arrangements and resources Description of the envisaged AML/CFT related internal systems and controls and how they respond to the ML/TF risks identified in the ML/TF risk assessment in light of the risks identified in the ML/TF risk assessment Description of the origin of the resources that constitute the capital endowment, and the channel used for the transfer of the instruments that will be part of the capital endowment

Table 6: Capital endowment as per Section 5 of Part I of the draft Guidelines 6.1 Forecast determination of the capital endowment requirement relying on the financial forecasts included in the business plan, based on the envisaged class of the TCB, in accordance with Article 48e CRD 6.2 List of the envisaged instruments that will compose the capital endowment at the time of the submission of the application for authorisation and a statement that they meet the conditions laid down in the EBA Guidelines on the

endowment 6.3 Copy of the contract of the escrow account in accordance with Article 48e(3) CRD 6.4 E vidence that the capital endowment is deposited in an escrow account or, if it has not yet been deposited in part or in total at the time of the submission of the application for authorisation, indication of the timeline for such deposit before the authorisation to commence the activity as a TCB is effective in accordance with national law 6.5 Description of arrangements, strategies, processes and mechanisms to meet the capital endowment requirement on a continuous basis

Table 7: Liquidity requirements as per Section 6 of Part I of the draft Guidelines

7.1 Forecast determination of the liquidity requirement relying on the financial forecasts included in the business plan 7.2 Funding strategy and liquidity planning 7.3 Description of the envisaged funding sources of the TCB, including any intragroup funding arrangements within the limits of the exception set out Article 48c(4), point (d) CRD 7.4 Confirmation that the liquid assets destined to meet the liquidity requirements are unencumbered and that the assets fulfilling the liquidity requirement are not counted towards the capital endowment requirement 7.5 Evidence that the liquid assets are deposited in an account in accordance with Article 48f CRD or, where the liquid assets have not yet been deposited in part of in total at the time of the submission of the application, indication of the timeline to deposit such liquid assets before the authorisation to commence the activity as a third-country branch is effective in accordance with national law 7.6 Description of the liquidity governance arrangements demonstrating the capacity to manage the liquidity in the base case and stress scenario basis, including:

• - the ability to compute the applicable liquidity requirements in accordance with Art. 48f(1) and (2) CRD, and

framework

Table 8: Programme of operations: booking arrangements as per Section 7 of Part I of the draft Guidelines

8.1 Relevant policies with a description of the processes and procedures established to maintain the registry book and record all the assets and liabilities booked or originated by the third-country branch, as well as off balance sheet items, as referred in Article 48h (1) of CRD 8.2 Policy on booking arrangements for the management of the registry book referred in Article 48h (2) of CRD, with clear rationale of the booking arrangements, including planned intragroup funding transactions (within the limits set out in Article 48c(4), point (d) CRD, hedging arrangements or other transfers of risks, and how those arrangements align with the TCB’s business and risk management strategy 8.3 Evidence of the approval of the policy on booking arrangements by the governing body of the head undertaking

Table 9: Exemption from submission of information as per Section 8 of Part I

9.1 Where the circumstances set out in Section 8 of Part I of the Guidelines are met, submission of a declaration indicating the information listed in Part I, Sections 1 that has

confirmation that it is still true, accurate and up-to-date. The declaration should also indicate the competent authority holding the relevant information, the references and date of the previous positive procedures.