EBA欧洲银行-2008-09-19-3L3-Public-hearing-on-MA-Guidelines_44页_547kb

3L3 Consultation Paper Summary: Guidelines for the Prudential Assessment of Mergers and Acquisitions

Core Content

The 3L3 Consultation Paper outlines guidelines for the prudential assessment of mergers and acquisitions (M&A) within the European Union. These guidelines aim to ensure that the acquirer is suitable, the acquisition is financially sound, and that money laundering (ML) and terrorist financing (TF) risks are mitigated. The paper is part of the ongoing efforts by the Committee of European Banking Supervisors (CEBS) to promote efficient and consistent supervision across the EU financial sector.

Main Objectives

• Achieve a common understanding of the five assessment criteria.
• Define appropriate cooperation arrangements between supervisory authorities.
• Establish an exhaustive and harmonized list of information required for the assessment process.

Five Assessment Criteria

1. Reputation of the proposed acquirer (C1), including AML/TF (C5)

   • Focuses on the integrity and professional competence of the acquirer.
   • Includes checks on criminal records, investigations, and past business dealings.
   • Proportionality applies to the level of information required.
   • No proportionality applies to ML/TF suspicion.

2. Financial soundness of the proposed acquirer (C3)

   • Evaluates the capacity to finance the acquisition and maintain financial stability.
   • Includes conflict of interest checks.
   • Proportionality applies based on the acquirer’s nature and the acquisition’s impact.

3. Future compliance of the target institution (C4)

   • Ensures the target institution will continue to meet prudential requirements.
   • Includes checks on governance, internal control, and risk management.
   • A clear link exists between the acquirer’s financial soundness and the target’s future compliance.

4. Control and shareholding structure

   • Defines control as per the sectoral directives, typically involving 10% or more of capital or voting rights.
   • Qualifying holdings may require different levels of scrutiny depending on the level of control and influence.

5. Proportionality

   • Applies to information requirements and assessment procedures.
   • Ensures that the complexity of the assessment matches the scale and impact of the acquisition.

Practicalities of the Cooperation Process

• Notification requirement:

  • The proposed acquirer and persons acting in concert must notify the supervisory authorities as soon as the decision to acquire is made.
  • Exemptions may be allowed for certain information.

• Assessment timeline:

  • Reception of notification and acknowledgment must be done within 2 working days.
  • Decision must be made within 60 working days.

• Cooperation with third countries:

  • If the acquirer is from a third country, the assessment may rely on substantial equivalence of regulations, facilitated by cooperation and standardized formats.

• Coordination mechanisms:

  • E-mail and preliminary dialogue are used for prompt and secure communication.
  • Limited number of persons involved to ensure efficiency and security.
  • Model templates are provided for standardized information exchange.

Information Required for the Assessment

The Directive requires a fixed list of information, divided into two sections:

I. General Information Requirements

• Identity of the acquirer (natural person, legal person, or trust).
• Criminal records, investigations, authorizations, and past assessments.
• Financial position and strength ratings.
• Non-financial interests of the acquirer.
• Description of the proposed acquisition (target institution, holding size, etc.).
• Financing details of the acquisition.

II. Specific Information Proportionate to Shareholding

• Change in control (≥50%):

  • Requires a business plan with strategic development, financial statements, and governance impact.

• Qualifying holding (<50%):

  • The level of information varies depending on the degree of influence.
  • For <20%:
    • Policy of the acquirer regarding the acquisition.
    • Intentions towards the target institution.
  • For 20–50%:
    • More detailed information on influence on management, financial position, and strategic development.

Key Deadlines and Contact

• Deadline for responses: 3 October 2008
• Contact email: m&a@c-ecs.org
• Public hearing: 19 September 2008

Conclusion

The Consultation Paper emphasizes the need for harmonized, proportionate, and efficient prudential assessments of M&A. It outlines clear procedures for notification, cooperation, and information exchange, while also highlighting the importance of integrity, financial soundness, and ML/TF risk mitigation. The guidelines aim to enhance supervisory consistency and financial stability across the EU.