This document presents the proposed regulatory technical standards regarding accounting arrangements for third-country branches providing banking services in a Member State. It establishes minimum requirements for maintaining a registry of assets and liabilities, as well as off-balance sheet items, to ensure autonomous management within these branches. The standards aim to harmonize the application of accounting…
This document is a final report from the European Banking Authority (EBA) published in January 2026. It presents the Draft Regulatory Technical Standards (RTS) specifying the modalities for maintaining accounting registers (booking arrangements) that third-country branches (TCBs) must apply within the European Union, in accordance with Article 48h of Directive 2013/36/EU (CRD). The scope covers regulatory requirements related to the recording of assets, liabilities, and off-balance sheet items of TCBs operating in a Member State, as well as the autonomous management of these items. The document comprises 36 pages and is addressed to supervisory authorities, third-country financial institutions, and banking risk and compliance practitioners.
- Subject: The document details the Regulatory Technical Standards (RTS) that third-country branches (TCBs) must apply for maintaining an accounting register compliant with Article 48h of the CRD, to ensure precise and comprehensive tracking of assets, liabilities, and off-balance sheet items related to their activities in a Member State.
- Importance: These standards are essential to harmonize TCB practices across the EU, guarantee autonomous and transparent risk management at branch level, and enable effective and proportionate supervision according to TCB classification (level 1 or 2) based on the volume of recorded assets and liabilities.
- Key findings:
- Article 48h requires TCBs to maintain a detailed register of "booked" assets and liabilities (recognized according to the applicable accounting framework) and "originated" items (partially or fully transferred to other entities).
- The RTS specify the methodology to identify, record, and monitor these items, including off-balance sheet elements, relying on international accounting principles (IFRS or accepted national standards).
- Intragroup transactions must be recorded as if conducted with third parties to ensure a comprehensive view of activities.
- The RTS define a minimum register content, including information on counterparties, instruments, accounting, protections, risk transfers, as well as qualitative and quantitative data on risks and their management.
- A public consultation allowed adjustments to the RTS, notably to limit the maintenance of registers for assets transferred to entities outside the group to the current reporting period, and to authorize the use of group systems under autonomous risk management conditions.
- Conclusions: The RTS provide a harmonized, proportionate, and clear framework for maintaining accounting registers of TCBs, strengthening prudential supervision and risk management at branch level.
- Recommendations: Submission of the RTS to the European Commission for adoption, with mandatory implementation in all Member States, accompanied by ongoing monitoring of their application.
- Context: Directive 2013/36/EU (CRD) establishes a harmonized prudential framework for third-country branches in the EU, including the obligation to maintain a detailed accounting register (Article 48h) to ensure transparency and autonomous management of assets and liabilities.
- Issue: The absence of precise technical standards risks divergent practices among Member States, complicating supervision and risk management related to TCBs.
- Stakes: Harmonize register maintenance methods, ensure data reliability on assets, liabilities, and risks, and facilitate classification and supervision of TCBs according to their size and complexity.
- Objectives: Define a clear and harmonized methodology for identifying, recording, and monitoring assets, liabilities, and off-balance sheet items of TCBs, specify the minimum register content, and frame information on associated risks.
- Scope: Applies to TCBs operating in a Member State, covering all authorized transactions, those not requiring authorization, intragroup transactions, and those arising from reverse solicitation.
- Limits: The RTS do not create accounting obligations distinct from existing standards but rely on them for register maintenance; risk management must remain proportionate to the size and complexity of TCBs.
1. Regulatory framework and obligations of TCBs:
- The CRD requires TCBs to maintain an autonomous and precise accounting register of assets, liabilities, and off-balance sheet items related to their activities in the Member State (p. 3-7).
- The RTS specify the application modalities of this obligation, notably the distinction between "booked" assets/liabilities (recognized according to the accounting framework) and "originated" (transferred to other entities) (p. 8-9).
2. Register maintenance methodology:
- TCBs must have an accounting system enabling timely and accurate identification and recording of all transactions, assets, liabilities, and off-balance sheet items (p. 7, 14).
- Accounting recognition and derecognition principles are used to determine what must be recorded as "booked" or "originated" (p. 8, 14).
- "Originated" assets and liabilities must be monitored until the associated risks are extinguished, measured at their remaining nominal amount (p. 15).
- Off-balance sheet items include contingent assets or liabilities and unrecognized derivatives, which must be recorded to assess risks (p. 8-9, 14).
3. Minimum register content:
- The register must contain information on counterparties (name, geographical area, economic activity, default), instruments (amounts, type, dates, rates, currency), accounting (classification, net value, amortization), protections received, and instruments held in escrow (p. 15-16).
- For "originated" assets/liabilities, information on the beneficiary entity and type of transfer must be recorded (p. 16).
- For off-balance sheet items, data similar to those for assets/liabilities are required, including triggering events (p. 16).
4. Risk management and associated information:
- The register must include qualitative and quantitative information on risks related to assets, liabilities, and off-balance sheet items, proportionate to the size, organization, and complexity of TCBs (p. 16-17).
- This information includes risk descriptions, management methods and metrics, as well as risk concentration (p. 16-17).
5. Treatment of intragroup transactions and risk transfer:
- Intragroup transactions, including financing between TCBs and the parent company, must be recorded as if conducted with third parties (p. 7, 23, 31).
- Assets/liabilities transferred to entities outside the group must be monitored only for the current reporting period, with mandatory transfer documentation (p. 23-24, 28-29).
6. Public consultation and adjustments:
- The consultation revealed concerns about the scope of transfers to "other entities," the need for separate processes, and the relevance of risk management information in the register (p. 23-26).
- In response, the RTS were amended to limit register maintenance for assets transferred outside the group to the reporting period, remove the obligation for separate processes, and confirm inclusion of risk information in accordance with the CRD (p. 24, 30-31, 34-35).
7. Impact and costs:
- The chosen approach relies on existing accounting frameworks (IFRS or national standards) to reduce costs and avoid parallel processes (p. 20).
- Flexibility in defining register content and risk information aims to ensure proportionality and limit burdens for TCBs (p. 21-22).
- Expected harmonization should facilitate supervision and reduce divergences among Member States (p. 18-22).
- Established facts:
- The RTS specify a clear and harmonized methodology for maintaining the accounting register of TCBs, compliant with Article 48h of the CRD (p. 3-17).
- The distinction between "booked" and "originated" assets/liabilities is based on accounting recognition and derecognition principles (p. 8, 14).
- Off-balance sheet items, including certain unrecognized derivatives, must be recorded to ensure a complete risk view (p. 8-9).
- Intragroup transactions must be treated as external operations to guarantee transparency (p. 7, 23, 31).
- The public consultation led to adjustments aimed at ensuring proportionality and feasibility (p. 23-26).
- Assumptions:
- TCBs already apply international or national accounting frameworks, facilitating RTS integration (p. 14, 20).
- TCBs have or can implement systems allowing precise tracking of their assets, liabilities, and risks (p. 7, 14).
- Interpretations:
- The approach based on existing accounting standards reduces costs and promotes consistency (p. 20).
- Flexibility in register content and risk information allows adapting requirements to TCB size and complexity, avoiding excessive burdens (p. 21-22).
- Uncertainties:
- Effective implementation will depend on TCBs' capacity to adapt their systems and processes, notably for monitoring transfers outside the group (p. 23-24).
- Precise interpretation of "booked" and "originated" concepts may vary according to applied accounting frameworks, despite clarifications provided (p. 26-27).
- The RTS finalized by the EBA provide a harmonized, clear, and proportionate framework for maintaining accounting registers of TCBs in accordance with Article 48h of the CRD (p. 3-17).
- They strengthen transparency, autonomous risk management, and effective supervision of TCBs within the EU.
- The RTS must be submitted to the European Commission for adoption, then published and directly applied in all Member States (p. 4, 17).
- Key measures include:
- The obligation for TCBs to maintain a register separate from their parent company, including assets, liabilities, off-balance sheet items, and risk information (p. 14-17).
- Recording intragroup transactions as external operations (p. 7, 23).
- Time-limited maintenance of registers for assets/liabilities transferred outside the group (p. 23-24).
- Flexibility granted to TCBs to calibrate register content and risk information according to their size and complexity (p. 21-22).
- TCBs are recommended to establish or adapt their systems and processes to ensure compliance with these RTS upon their entry into force.
- Supervision should ensure proper application and adaptation of practices according to TCB specificities.
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