The European Commission has published a legislative proposal for amendments to the Financial Conglomerates Directive (2002/87/EC) (the FCD). The proposed revisions to the FCD include:

  • Sector-specific supervision and supplementary supervision can be applied to a conglomerate's parent entity, including holding companies. This means that banking supervision remains applicable even if a banking group acquires a significant stake in an insurance business and vice versa. Currently, supervisors have to choose which supervision they apply when a group acquires a significant stake in another sector and when the parent entity is a holding company.
  • Supervisors should be allowed to identify a group as a financial conglomerate and apply supplementary supervision when justified by potential group risks as a whole. The current definition of a financial conglomerate has quantitative indicators, whereas the Commission's proposal includes risk-based assessments.
  • Financial supervisors should be allowed to waive a group from supplementary supervision if it does not meet a EUR 6 billion total assets threshold and if the supervisor assesses the group risks to be negligible.
  • The proposed revision of the FCD also amends the Capital Requirements Directive (2006/48/EC and 2006/49/EC) (CRD) and the Directive on Supplementary Supervision of Insurance Undertakings in Insurance Groups (98/78/EC) (Insurance Groups Directive).

The European Parliament and EU Member States will consider the Commission's proposal.