EBA publishes report on prudential consolidation and guidelines on ancillary services undertakings

The European Banking Authority (EBA) has published a Report on prudential consolidation and final Guidelines on ancillary services undertakings (ASU) under the Capital Requirements Regulation (CRR).

The publications aim to enhance the efficiency and proportionality of the prudential consolidation framework, promote a level playing field, foster convergence of supervisory practices, and improve comparability of prudential requirements across the European Union.

Report on prudential consolidation

The report offers targeted recommendations to support the European Commission in considering legislative adjustments to the EU regulatory framework. It clarifies implementation challenges identified through recent EBA investigations and suggests improvements such as:

• Simplification of sub-consolidation requirements to reduce complexity for groups with multiple layers.
• Better alignment with accounting standards regarding scope and methods.
• Refinement of the control definition for consistent interpretation across jurisdictions.
• Clarification on determining the perimeter of prudential consolidation, especially when an insurance undertaking within a bank-led conglomerate acquires a financial institution and the “Danish compromise” (Article 49 of the CRR) is applied.

Guidelines on ancillary services undertakings

The guidelines establish clear criteria for identifying activities that fall within the scope of ancillary services undertakings under Article 4(1)(18) of the CRR. These include activities considered a “direct extension of banking,” “ancillary to banking,” or “similar activities,” such as operational leasing, property management, or data processing services.

The guidelines also address innovative and digital business models, including fintech and technology-driven services, which may pose new ancillary risks within banking groups. The overall goal is to promote supervisory convergence, ensure a level playing field, and enhance comparability of prudential requirements across the EU.

Legal basis and background

The report on prudential consolidation was developed under Article 18(10) of Regulation (EU) No 575/2013, which requires the EBA to assess the definitions and provisions of the regulation.

The guidelines on ancillary services undertakings were developed according to Article 4(5) of Regulation (EU) No 575/2013, which mandates the EBA to specify criteria for identifying relevant activities.

More information is available on the official EBA website.