European Union Treatment of Third-Country Entities

Extract

[...] Cela pose la question of prudent supervision of subsidiaries and branches on national territory. National authorities can only monitor the subsidiary or branch present on their territory, which amounts to surveiller seulement une partie du risque. The question that arises is then of to know if the national supervisory authority has the right to be interested in the entire establishment, including the parent company located abroad. The supervision then becomes complex, because in the conditions of the approval, it can be It is foreseen that the ACPR may request the necessary information concerning the foreign parent company in order to assess the risk represented by the activity of the subsidiary or branch in France. [...]

[...] However, article 47 impose a rule that Member States cannot grant a more favorable treatment to an establishment from a third country than to an establishment located within the Union. This is not a principle of non-discrimination stricto sensu, because it is possible to treat less favorably establishments of third countries, but it is forbidden to treat them more advantageously than those of the European Union, taking into account both European law and the specificities of national legislation. When a third-country establishment wishes to create a subsidiary in a Member State, it must comply with conditions that cannot be less stringent than those imposed on a subsidiary of a European credit institution. [...]

[...] Let's take the example of a bank of South Africa who implants a subsidiary in France. It is normal that the ACPR, who understands that this subsidiary is a relay of its activities in Europe, may exercise a right of oversight on the parent company. If the activities of the latter represent a systemic risk, or if its financial situation is worrisome, this may have [...]

[...] However, the Prudential Control and Resolution Authority (ACPR) remains competent for him to grant a licence. In examining in detail the applicable regulation, it is noted that the ACPR has a relatively significant power of appreciation. Thus, the regime applied in France begins to resemble an equivalence regime for third countries, as we know it in financial matters. In fact, the ACPR reserves the right to assess the equivalence of the foreign legislation governing the parent institution in order to determine the level of authorization to be granted to the branch in France. [...]

[...] In this regard the subsidiary, she must respecting individually the prudent criteria related to own funds, at the human resources, at the leadership skills and at the prudent ratios. As a French-established entity, it is subject to French law, even if its shareholders are foreign. It is a French establishment, although of foreign origin. For the subsidiaries, the the situation is more complex, car their results are integrated into those of the parent company or the original company. It is impossible to assess the solvency of the branch without taking into account the risks posed by the parent company. [...]