The proposed regulatory technical standards (RTS) specify the mechanisms of cooperation and the conditions for the functioning of colleges of supervisors for competent authorities supervising third-country branches. They aim to ensure effective supervision of third-country groups within the European Union, building on the experience gained with colleges of supervisors of credit institutions. The document is…
The document is the final report of the European Banking Authority (EBA) dated January 2026, entitled "Final draft Regulatory Technical Standards on cooperation and colleges of supervisors for third-country branches." It is a regulatory technical standard (RTS) developed pursuant to Article 48p(7) of Directive 2013/36/EU. The scope covers the cooperation mechanisms and operating conditions of colleges of supervisors for third-country branches and subsidiaries of the same third-country group within the European Union. The document comprises 52 pages, of which approximately 39 were provided for the synthesis. The sector concerned is banking supervision, focusing on third-country branches operating in the European Union, and the application period is contemporary to 2026.
The main subject concerns the definition of regulatory technical standards (RTS) to organize cooperation and the functioning of colleges of supervisors among competent authorities supervising branches and subsidiaries of third-country banking groups in the European Union. This cooperation aims to ensure comprehensive, effective, and harmonized supervision of third-country groups, to avoid circumvention of regulatory requirements and prevent any negative impact on the financial stability of the Union (p. 3). The document builds on experience gained from existing colleges of supervisors for credit institutions, while adapting rules to the specificities of third-country branches and subsidiaries. The RTS are structured into two chapters: (1) establishment and functioning of colleges, including group mapping, written cooperation arrangements, planning of supervisory activities in normal and emergency situations; (2) general cooperation and information exchange when the creation of a college is not required (p. 3-4). The main findings are that the RTS provide a clear, proportionate, and harmonized framework for cooperation between authorities, with a central role assigned to the lead authority (that of the Member State where the largest branch is located) to coordinate mapping, college establishment, and information exchanges (p. 6-7). The document recommends the adoption of these RTS by the European Commission, followed by review by the European Parliament and the Council, for publication in the Official Journal of the European Union (p. 4). These standards should improve risk understanding, coordination in normal and emergency situations, and consistency in the implementation of the prudential framework for third-country branches in the EU.
Before the adoption of Directive 2013/36/EU, regulation of third-country branches in the EU was fragmented and mainly national, despite a growing presence of these branches in European banking markets (p. 5). The Directive establishes a common prudential framework, including minimum requirements for authorization, governance, supervision, and reporting, as well as a cooperation framework among competent authorities. Article 48p requires authorities supervising branches and subsidiaries of the same third-country group to effectively exchange information and cooperate to ensure comprehensive supervision, preventing circumvention of rules and protecting the financial stability of the EU (p. 5). The EBA is mandated to develop RTS specifying the operating conditions of colleges of supervisors for "class 1" branches and cooperation mechanisms when the creation of a college is not required (p. 5-6). The objective is to provide a clear, proportionate, and adapted framework to the specific nature of third-country branches and subsidiaries, facilitating coordination of authorities in normal and emergency situations, and fostering harmonized implementation of the prudential framework within the Union (p. 6-7). The document is limited to supervision of third-country groups with branches and subsidiaries in the EU, excluding other entities not covered by the mandate.
1. Establishment and functioning of colleges of supervisors:
- Mapping of third-country groups in the EU is a key step carried out by the lead authority, identifying subsidiaries and branches, their local importance (size, market share, systemic impact), and branch classification (class 1 or 2) (p. 12-13).
- The lead authority decides on the necessity to establish a college according to Directive criteria, notifies members (authorities supervising subsidiaries, class 1 branches, EBA) and invites other authorities as observers (third-country authorities, AML/CFT authorities, ECB, resolution authorities) under equivalent confidentiality conditions (p. 13-15).
- Written arrangements define the structure, cooperation modalities, information exchanges, management of confidential information, planning of activities in normal and emergency situations, meeting procedures, and participation of members and observers (p. 15-16).
- The lead authority organizes at least one annual meeting, in person or virtual, with participation adapted according to topics and importance of concerned entities (p. 17).
- Information exchanges cover financial data, prudential ratios, risk management, governance, deposit protection, group strategy, reverse solicitation services, critical functions, and recovery measures (p. 19-20).
- Mandatory notifications on authorizations, withdrawals, classifications, decisions to convert into subsidiaries, systemic importance assessments, sanctions, and corrective measures are provided (p. 20-24).
- In case of an event materially affecting the risk profile, authorities promptly exchange quantitative and qualitative information, assess impact, contagion risks, and coordinate a supervisory response (p. 24-25).
- A specific framework for emergency situations is established, including procedures, minimum information to exchange (nature, impact, measures taken, liquidity and capital data), coordination of assessment and supervisory response, and coordinated external communication (p. 24-27).
2. Cooperation and information exchanges without a college:
- When the creation of a college is not required, the lead authority prepares written cooperation arrangements among authorities supervising subsidiaries and branches, including group structure, information exchange modalities, confidentiality, planning of activities in normal and emergency situations, and risk indicators (p. 27-29).
- Information exchanges are similar to those in a college context, covering financial data, governance, strategy, recovery measures, authorizations, classifications, systemic importance assessments, sanctions, and corrective measures (p. 29-33).
- Cooperation in emergency situations is also provided for (p. 33-34).
3. Role of the EBA and proportionality:
- The EBA is a member of the colleges to promote and monitor their proper functioning (p. 7, 9).
- The RTS adopt a proportionate approach, simplified compared to colleges for credit institutions, with a standardized mapping model, a college without substructures, and a minimum triennial frequency for mapping updates, adapted to significant developments (p. 6).
4. Impact and objectives:
- The RTS aim to harmonize supervision of third-country branches, improve risk understanding, avoid duplications, and ensure effective coordination in normal and emergency situations (p. 35-37).
Established facts:
- Supervision of third-country branches in the EU was fragmented before Directive 2013/36/EU, with limited harmonization (p. 5).
- Article 48p requires cooperation and information exchange among authorities supervising branches and subsidiaries of the same third-country group (p. 5).
- The RTS define a clear framework for establishing colleges, group mapping, information exchanges, emergency situation management, and cooperation in the absence of a college (p. 3-4, 8-33).
Assumptions:
- The proportionate approach, simplified compared to colleges for credit institutions, is sufficient to ensure effective supervision of third-country branches (p. 6).
- Inclusion of the EBA as a member of the colleges will facilitate coordination and monitoring of their functioning (p. 7, 9).
Interpretations:
- Regular and updated mapping is essential to identify relevant entities and organize cooperation (p. 12-13).
- Coordination in emergency situations is crucial to prevent systemic risks and ensure a coherent supervisory response (p. 24-27).
Uncertainties:
- The practical effectiveness of cooperation and information exchanges will depend on concrete implementation by competent authorities and their capacity to meet defined deadlines and modalities (p. 35-37).
- The exact impact on the financial stability of the EU remains to be observed after the RTS enter into force.
The EBA concludes that the draft RTS provide a clear, proportionate, and harmonized framework for cooperation among authorities supervising branches and subsidiaries of third-country groups in the EU, both in the context of colleges and in general cooperation in the absence of a college (p. 3-4, 6-7). Adoption of these RTS should enable more effective supervision, better risk understanding, enhanced coordination in normal and emergency situations, and consistent implementation of the prudential framework (p. 35-37). The document recommends submission of the RTS to the European Commission for approval, followed by the review procedure by the European Parliament and the Council, before official publication (p. 4). No detailed action plan is mentioned beyond this regulatory adoption process.
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