CRD6 could shut out cross-border financial services into the EU
The European Commission has put forward draft legislation which would require non-EU firms to establish a branch in the EU before starting to provide “banking services”. The proposal is part of the EU’s Banking Package 2021. Unclear drafting leaves open the possibility that the requirement to provide these services from an authorised branch could apply to not only banks but other types of financial institution as well.
In any case, it seems that the proposals would end national cross-border licences and exemptions which enable cross-border services into EU Member States. They could also require firms to set up authorised branches to provide some services, such as spot FX and wholesale lending, even in Member States where they are not licensable activities. Our briefing highlights the key provisions and their potential impact.