31 May 2009

Joint consultation on issues noted in the Financial Conglomerates Directive

One of the major proposals is a change to the definition of holding companies, including the definitions of different types of holding companies and their impact on the scope of sectoral group supervision.

The Joint CEIOPS and CEBS Committee on Financial Conglomerates, JCFC, consult on its proposed advice to the Commission on its review of the Financial Conglomerates Directive.

 

One of the major proposals from the JCFC is to propose a change to the definition of holding companies to ensure that the sectoral directives are supplemented, in the case of groups with cross-sector activities, and that this is appropriately applied, based on the risk profile of the group.

 

Specifically, the JCFC has identified the following four issues where the FCD may not achieve its objectives:

 

1. The definitions of different types of holding companies in the FCD and their impact on the scope of sectoral group supervision;

2. The definition of “financial sector” in Article 2.8 of the FCD and the application of the threshold conditions in Article 3 of the FCD;

3. Implications of different treatments of participations for the identification and scope of supplementary supervision of financial conglomerates (FCs); and

4. The treatment of ‘participations’ in respect of risk concentrations (RC) and intra-group transactions (IGT) supervision and internal control mechanisms (respectively, Articles 7, 8 and 9 FCD).

 

The review is based on the current framework implemented in national legislation. Although this review acknowledges some of the recent changes to European sectoral legislation, it does not anticipate any necessary changes to the FCD resulting from these developments. 

 

Deadline for consultation is 28 August 2009.

 

Press release

Consultation Paper

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