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

1. Overview

This paper is intended to assist Member States in relation to their implementation of the Branch Requirement under CRD VI. The Trade Associations, and their Members, are concerned to ensure that 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 (i) what we believe is the best approach to align national transposition laws with the policy intents behind the EU text, and (ii) 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. By way of example, the industry remains concerned about the potential scope of the Branch Requirement, including but not limited to its application to core banking services (especially deposit taking) which are ancillary to other non-core banking services such as payment services or cash clearing. Since such issues do not result from transposition errors but rather a lack of clarity in the Level 1 text of CRD VI, we do not consider these for the purposes of this paper. We nevertheless consider it important to emphasise this point given that a number of products impacted by the lack of clarity in the Level 1 text (for example, payments and cash management services, such as cash clearing) are essential for EU firms to operate smoothly across markets and to manage currency risk effectively.

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.

2. Background

2.1 In June 2024, the European Commission published Directive 2024/1619 (CRD VI) enacting revisions to the Capital Requirements Directive (2013/36, 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.

2.2 As a Directive, CRD VI must be transposed into the national law of each EU Member State.^[1]Member States must do so by 10 January 2026, though under CRD VI the Branch Requirement is to apply only from 11 January 2027.

2.3. To date, a number of EU Member States have published consultations on, or draft legislation transposing, CRD VI.^[2] Certain of those proposals differ from the Level 1 text of CRD VI in several significant areas relating to the Branch Requirement. While we accept that translation into different languages can result in interpretations which differ from the minimum standards set by CRD VI, given the significant implications of this new regime to the market for financial services in Europe, we ask Member States to take particular care to adhere faithfully to the intention behind the Branch Requirement as included in CRD VI.

2.4 This paper aims to identify certain errors and inconsistencies in current draft or published national transpositions of the Branch Requirement and set out what we consider to be the correct and practically feasible interpretation of the prescribed exemptions in line with policy intention. More specifically, the Trade Associations recommend that Member States align in their respective transpositions of EU law based on the existing industry legal interpretation that:

a. entities providing core banking services that are ancillary to MiFID services or exercising follow-on rights in respect of reverse-solicited services (as explained below) should not be required to establish a branch as per Article 21c for those services;

b. EU recipients of core banking services will benefit from grandfathering provisions to protect their acquired rights within existing contracts entered into before 11 July 2026 once Article 21c comes into force; and

c. Article 21c will apply from 11 January 2027 (and not any earlier) across all Member States.

To read the full paper, click here, or click on the download button below.

[1] CRD VI is a "text with EEA relevance", meaning all jurisdictions in the European Economic Area will be required to implement the provisions of CRD VI under the EEA agreement. References to "EU Member States" (or similar) in this paper should be interpreted as including reference to EEA jurisdictions not within the European Union.

[2] For ease of reference, at the back of this paper we have provided a list of member states who have, to date, published draft or final national transposing legislation of CRD VI with links to the relevant (local language) web pages.