75. For this purpose, competent authorities should achieve a clear view on: (a) the types of …

For this purpose, competent authorities should achieve a clear view on:

• (a) the types of activities that the applicant credit institution intends to take up, including the identification of the core and non-core business lines and of the types of targeted customers. This analysis should be functional to determine the activities covered by the authorisation, or, consistently with paragraph 58, the scope of the authorisation, as well as, as the case may be, the availability of other suitable authorisation regimes. The review should also provide the competent authority with an understanding of the associated risk profile, including ML/TF risk, and the impact on the capital requirements, liquidity and funding needs as well as on internal governance arrangements.
• (b) the geographical distribution of the activities, including their envisaged exercise through subsidiaries and branches or through the freedom to provide services within the EU or in a third country, and the planned future expansion. In particular where the business model envisages the use of digital solutions, competent authorities should assess whether the planned cross-border activities would fall under the ‘freedom to provide services’ or the ‘right of establishment’. The analysis should support, among other things, the competent authorities’ understanding of the need for any further regulatory requirement to gain access to the target markets (e.g. passport notification), any related regulatory risk, and the business or financial rationale for the envisaged corporate structure and geographical distribution. It should also be supported by the analysis of the ML/TF risk associated with a jurisdiction, conducted in the context of the assessment of the operational structure. Where an applicant credit institution intends to carry out a large part of its activities outside of the jurisdiction where it submitted the application for authorisation, the competent authority, in accordance with recital (16) CRD, should assess whether the choice of the jurisdiction of application has the purpose of avoiding stricter regulatory standards (e.g. in respect of the AML/CFT regime) in force in another Member State.
• (c) the overall strategy, exploring the business rationale of the applicant credit institution, as well as the overall group strategy when the applicant belongs to a group. This includes an appropriate understanding of the strategic goals, the key business drivers, any identified competitive advantage, quantitative and qualitative objectives of the business plan, including the company’s product or service, the value proposition, and the market positioning.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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