5.3 On-the-spot checks and inspections of significant-plus branches

Without prejudice to Article 52 of Directive 2013/36/EU, on-the-spot checks and inspections of branches, to the extent that they are planned in advance, should be included in the college SEP developed in accordance with Articles 16 and 31 of Commission Delegated Regulation (EU) 2016/98.

In order to ensure that the consolidating supervisor and the home and host competent authorities have an overview of planned on-the-spot checks and inspections of branches, even those that are not performed on a joint basis, and to avoid unnecessary duplication of supervisory efforts and requests to institutions, the college SEP should, as far as practicable, include information on all such activities organised by either the home or the host competent authority, and their scope, timing and planned resources.

When the consolidating supervisor or the home or host competent authority decides on the timing of jointly performed activities, the authority initiating and organising the activities should take due consideration of the participating authorities’ needs in terms of resources and supervisory cycles, and in particular the SREP cycle.

On-the-spot checks and inspections in a branch that have not been originally planned but are initiated during the year should be communicated from one authority to the other without undue delay, and duly reflected in the updated college SEP.

The consolidating supervisor and the home and host competent authorities should ensure that the number of on-the-spot checks and inspections for significant-plus branches on a yearly basis is higher than for other types of branches.

A competent authority initiating an on-the-spot check or inspection (the initiator) in a significant-plus branch should apply the following process:

• (a) The initiator should invite the other authority to participate in the performance of the activity ensuring that the decision about the activity has been made in a reasonable timeframe allowing competent authorities to organise their participation (generally six weeks in advance of the start of the activity in the case of a pre-planned activity, but shorter notice might be sufficient in the case of an extraordinary activity). When doing so, the initiator should inform the invited authority about the scope of the activity in order to allow it to make an informed decision.
• (b) The authority receiving the invitation should confirm its participation without undue delay, and at the latest within one week of receipt of the invitation referred to in point (a), unless the on-the-spot check or inspection is of an urgent nature, in which case the authority receiving the invitation should confirm its participation within a reasonable timeframe set by the other authority, in light of the particular circumstances warranting an on-the-spot check or inspection.
• (c) Where the authority receiving the invitation decides to participate in the activity:
• i. the initiator should, to the extent possible, schedule the activity, including the timing of the meetings organised within the performance of the activity, with due consideration to the availability of the participating authority;
• ii. the initiator should ensure that information relevant to the performance of the activity is made available to the participating authority, subject to the national law of the Member State where the check or inspection is carried out;
• iii. the initiator should draft a report summarising the findings of the on-the-spot check or inspection and should allow reasonable time for the participating authority to comment within a specified timeline to enable the timely finalisation of the report;
• iv. the authorities participating in the activity should strive to reach agreement on the report summarising the findings of the on-the-spot check or inspection before communicating the report to the institution and, where appropriate and in line with the administrative procedures, the branch;
• v. once the authorities participating in the activity finalise the report, the consolidating supervisor or the home competent authority should have it communicated to the institution or the group and, where appropriate and in line with the administrative procedures, the host competent authority should have it communicated to the management of the branch;
• vi. where the authorities participating in the activity fail to reach agreement on the report summarising the findings of the on-the-spot check or inspection, the authority initiating and organising the activity remains responsible for the finalisation of the report and its communication to the institution or to the management of the branch.
• (d) Where the authority receiving the invitation decides not to participate in the activity, the initiator should draft the report summarising the findings of the on-the-spot check or inspection and inform the consolidating supervisor and the home or host competent authority about the final findings as communicated to the institution and to the branch. Where an on-the-spot check or inspection of a branch is performed by the host competent authority and the consolidating supervisor or the home competent authority decides not to participate in the activity, the host competent authority should inform the consolidating supervisor and the home competent authority about the findings before communicating them to the branch.

The consolidating supervisor or the home competent authority should invite the host competent authority to participate in on-the-spot checks or inspections carried out at an institution when such activities are relevant to significant-plus branches (in particular, this should include meetings with the group’s or the institution’s management on issues concerning such branches; see also Section 5.6).