AI Summary of Article 21c Requirement to establish a branch for the provision of banking services by third-country undertakings
This regulation mandates that Member States require third-country undertakings to establish local branches for authorisation to conduct specified activities, with certain exemptions for transactions initiated by clients or counterparties located within the EU. Notably, this excludes retail clients and credit institutions.
Furthermore, the regulation permits the provision of closely related services without necessitating a branch, while also safeguarding existing contracts concluded before 11 July 2026. By July 2025, the EBA will evaluate potential exemptions for additional financial entities, considering the implications for financial stability and competitiveness, leading to possible legislative proposals.
Article 21c Requirement to establish a branch for the provision of banking services by third-country undertakings
1. Member States shall require undertakings established in a third country as referred to in Article 47 to establish a branch in their territory and apply for authorisation in accordance with Title VI to commence or continue carrying out the activities referred to in Article 47(1) in the relevant Member State.
2. The requirement laid down in paragraph 1 of this Article shall not apply where the undertaking established in a third country provides a service or activity to a client or counterparty established or situated in the Union that is:
(a) a retail client, an eligible counterparty, or a professional client within the meaning of Annex II, Sections I and II, to Directive 2014/65/EU established or situated in the Union where such client or counterparty approaches an undertaking established in a third country at its own exclusive initiative for the provision of any service or activity referred to in Article 47(1) of this Directive;
(c) an undertaking of the same group as that of the undertaking established in a third country.