38. Without prejudice to the paragraph above, competent authorities should not subject the transfer …

Without prejudice to the paragraph above, competent authorities should not subject the transfer of the credit institution’s activities to a temporary entity to the granting of prior authorisation where the following conditions are met:

• (a) the establishment of the temporary entity satisfies formal requirements of the structure for the execution of the transaction and the temporary credit institution’s expected lifetime corresponds to a ‘legal second’, i.e. an undefined short period of time during which the temporary entity holds the credit institution’s activities in order to formally complete a series of legal transactions that are required to merge the temporary entity with the acquirer, and
• (b) adequate and sufficient measures have been taken by the merging entities to address the execution risks of the transaction, including for the scenario that the transfer cannot be completed within the ‘legal second’. Such measures (for instance a transfer back of the activities) should aim to ensure that the temporary entity is prevented from being active on the market by carrying out activities that require authorisation as a credit institution.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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