The European Banking Authority (EBA) has recommended clarification of the impact on Ucits and AIFMD of the new Article 21c of the Capital Requirement Directive (CRD) following its own report into the direct provision of banking services from third countries.
The EBA says its quantitative and qualitative analysis “didn’t provide evidence to recommend the amendment of the new Article 21c of the CRD which identifies how core banking services should be provided in a member state”.
However, it did put forward that clarification of the interaction between Article 21c and other legislation “could be beneficial to authorities and market participants.
Citing its report summary (https://www.eba.europa.eu/sites/default/files/2025-07/761117e3-bdb6-473b-b0d5-964bccd5f410/Report%20provision%20of%20services%20from%203rd%20countries.pdf) the EBA notes that: ”
Article 21c does not expressly address the interaction with those Ucits and AIFMD provisions expressly entitling the concerned EU FSEs to receive core banking services for their ongoing operationality in third countries in accordance with their business model. Reference is made in particular to placing deposits in third country banks as eligible investments (Article 12 MMF Regulation or Article 50(1)(e) Ucits Directive); to opening of cash accounts with third country banks (Article 21(7) AIFMD); or to the delegation of the safe keeping of assets to sub-custodians (Article 21(11) of the AIFMD and Article 22a of the Ucits Directive) to the extent the latter also entail the provision cross-border core banking services such as taking of deposits or granting overdraft facilities to EU funds or asset management companies.”
Such clarification could be provided via the EBA Q&A tool, it suggested. The tool (https://www.eba.europa.eu/single-rule-book-qa) is set up to receive questions on the practical application or implementation of legislation that falls within scope of the EBA’s remit, including delegated and implementing acts, regulatory technical standards (RTS), guidelines and recommendations. This includes “Joint Q&As” where legislation is relevant to more than one European Supervisory Authority.
On Article 21c, the EBA was essentially tasked with reviewing the exceptions to the rule that require the establishment of a branch of a bank in an EU member state, that is, the general rule that prohibits the provision of banking services directly from a third country.
