-The Council adopted on 12 September 2002, by written procedure, a Common Position on Financial Conglomerates.
The Common Position follows the approach of the Commission proposal, with some amendments to the substance and to the presentation of the text. The changes to each article of the Commission proposal and the way in which the amendments proposed by the European Parliament are included and explained in the draft statement of Council Reasons.
The Common Position incorporates a number of the amendments proposed by the European Parliament and, while other amendments are not incorporated in the Common Position in the wording proposed by the European Parliament, the Council largely shares the concerns underlying these amendments and has taken them fully into account. The Council finds that the Common Position ensures a balance between the need to introduce supplementary supervision of financial conglomerates and the need to ensure that the supervision can work effectively and meet the desired objectives without imposing an inflexible and rigid regime on the financial sector.
Draft Statement (excerpt):
Among others some definitions included in Article 2 have been amended:
A new definition has been introduced, in Article 2 point 5, of the term 'asset management company', which is necessary for the purposes of Article 30.
Another new definition of the term 'relevant competent authorities', has been introduced in point 17. In order to facilitate the decision-making and make it effective the common position introduces a new concept, 'relevant competent authorities', defined in Article 2 point 17, which comprises the authorities most concerned in the supervision of a financial conglomerate.
The terms 'group' and 'close links' have been amended. The definition of a 'group' is more restricted than in the Commission proposal, but broader than the definition proposed in amendments 4 and 5 of the European Parliament.
- The Council finds it important to include the so-called 'horizontal groups' referred to in Article 12(1) of Directive 83/349, in all cases, and not leave the inclusion of these groups to national discretion.
- The definition of 'close links' is used in the common position purely to define intra-group transactions, and does not bear upon the determination of a group. The common position thus goes in the direction proposed by the European Parliament and can be considered to take partial account of the spirit of amendments 4 and 5.
The definition of the term 'financial conglomerate' has been made more precise without changing the approach of the Commission proposal. For the purposes of the definition the banking and investment services sectors are considered as one sector, and a financial conglomerate must have at least one entity in this sector and one in the insurance sector, and its activities in both sectors must be significant. It has also been made clear that any subgroup of a group which meets the criteria set out in the definition shall be considered a financial conglomerate in itself.
The term 'financial sector' has also been amended to make it more precise, and the definition in point 13 of 'close links' has been redrafted without changing the substance, in order to avoid unnecessary cross-references.
The identification of a financial conglomerate (Articles 3 and 4) has been made clearer and some substantial changes have been introduced:
the common position includes those groups, not headed by an EU regulated entity, with mixed activities (industrial or commercial and financial) which have a financial interest of at least 40%;
in addition to the 10% threshold set out in Article 3(2) of the Commission proposal for the determination of whether activities in different financial sectors are significant, the common position includes, as proposed by the European Parliament, an alternative threshold in Article 3(3). The Council fixed the threshold at EUR 6 billion;
Article 3 (4), (5) and (6) of the common position contains provisions allowing the relevant
competent authorities a degree of flexibility in applying the thresholds set out above;
Article 4 introduces a new procedure for the identification of a financial conglomerate and obliges the competent authorities involved to cooperate closely to this end.
Council press release 19 September
Conglomerates Council Common Position
© Council of the European Union
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