Position Paper on the National Transposition of Article 21C CRD VI

This joint financial services industry position paper is intended to assist EU Member States in relation to their implementation of Article 21c.

In 2024, the European Commission published a Directive enacting revisions to its Capital Requirements Directive (CRD). From 11 January 2027, CRD VI introduces a requirement for EU Member States to prohibit the provision of certain banking services in an EU Member State by a third country "institution" (in broad terms, a bank or a large investment firm) other than from a locally licensed branch (the Branch Requirement), unless a prescribed exemption applies. The restriction is specified as a new Article 21c of CRD.

UK Finance, along with six other financial services trade associations, are concerned to ensure that Article 21c’s implementation efforts adhere faithfully to the intention behind the Branch Requirement and do not depart from the key elements of CRD VI. To do otherwise risks unintended consequences, including potentially negative impacts on EU competitiveness and the market for financial services in the EU, for the benefit of EU customers.

To this end, the paper seeks to highlight:

What we believe is the best approach to align national transposition laws with the policy intents behind the EU text, and
Areas where transposition proposals to date pertaining to the Branch Requirement have differed from the Level 1 text or where interpretations taken by Member States have departed from the policy intention, thereby giving rise to concerns for the industry.

This paper is not exhaustive of the current issues of concern still under industry review in relation to the Branch Requirement under CRD VI. The industry has now been raising awareness for several years that the Branch Requirement will actively undermine EU competitiveness. Recent failure of the EBA to extend the exemptions to the Branch Requirement (see “Background” below) has further compromised this and driven fragmentation. This paper seeks to mitigate the adverse impact by aiming to reduce incorrect or inconsistent transposition of the Branch Requirement across EU Member States.

If you would like to discuss the paper please contact internationalaffairs@ukfinance.org.uk