10.1 General considerations

This title covers the combination of the findings of the assessments of the SREP elements into the overall SREP assessment. It also addresses the application by competent authorities of supervisory measures to address deficiencies identified through the assessment of the SREP elements. Competent authorities may apply supervisory measures as specified in Directive (EU) 2019/2034 (Articles 38, 39, 40, 41 and 42) and national law, and, where applicable, early intervention measures as specified in Article 27 of Directive 2014/59/EU, or any combination of the above.

Competent authorities should exercise their supervisory powers on the basis of deficiencies identified during the assessments of the individual SREP elements and taking into account the overall SREP assessment, including the score, considering the following:

• a. the materiality of the deficiencies/vulnerabilities and the potential prudential impact of not addressing the issue (i.e. whether it is necessary to address the issue with a specific measure);
• b. whether the measures are consistent with/proportionate to their overall assessment of a particular SREP element (and the overall SREP assessment);
• c. whether supervisory or other administrative measures are needed to address prudential deficiencies/vulnerabilities related to ML/TF risks within their supervisory remit after having liaised with the relevant AML/CFT supervisors;
• d. whether the deficiencies/vulnerabilities have already been addressed/covered by other measures;
• e. whether other measures would achieve the same objective with less of an administrative and financial impact on the investment firm;
• f. the optimal level and duration of application of the measure to achieve the supervisory objective; and
• g. the possibility that risks and vulnerabilities identified may be correlated or self-reinforcing, or both, meriting an increase in the rigorousness of supervisory measures.

When applying supervisory measures to address specific deficiencies identified in the assessment of SREP elements, competent authorities should take into account overall quantitative own funds and liquidity requirements to be applied based on the criteria specified in Titles 7 and 9.

When applying supervisory measures or sanctions to address prudential deficiencies related to ML/TF risk, competent authorities should engage with AML/CFT supervisors so that the underlying deficiencies/vulnerabilities are adequately addressed by the appropriate measures within the respective remit of AML/CFT supervisors and competent authorities from their respective perspectives.

Competent authorities may take immediate supervisory measures directly linked to the outcomes of any supervisory activities.