7 Conflicts of interests

Financial entities (⁵⁰ ) should identify, assess, and manage conflicts of interests with regard to their third-party arrangements.

⁵⁰ Financial entities within the scope of CRD should also refer to Title IV, Section 11, of the EBA Guidelines on internal governance while investment firms should refer to Section 10 of the EBA Guidelines on internal governance under Directive (EU) 2019/2034, and issuers of ARTs to the EBA RTS on conflict of interests under Article 32(5) of Regulation (EU) 2023/1114.

Where third-party arrangements create material conflicts of interest, including between entities within the same group or institutional protection scheme (IPS) related structure, financial entities need to take appropriate measures to manage those conflicts of interest.

When services supporting critical or important functions are provided by a TPSP that is part of a group or a member of an institutional protection scheme or that is owned by the financial entity, the conditions, including the financial conditions, are to be taken objectively. However, the pricing of service synergies resulting from providing the same or similar services to several institutions within a group- or an institutional protection scheme (IPS) may be factored in, as long as the TPSP remains viable on a stand-alone basis; within a group, this should be irrespective of the failure of any other group entity.