Rules on qualifying holdings in credit institutions

a) A merger by absorption may trigger a qualifying holdings procedure regulated by Articles 22-27 of Directive 2013/36/EU (CRD) if: - it entails the acquisition or further increase(*) of qualifying holdings in the absorbed institution or - it entails the acquisition or further increase(*) of qualifying holdings in the absorbing institution, (*) provided that the thresholds specified in Article 22(1) CRD (20%, 30% or 50%) are reached or exceeded or that the credit institution at stake would become a subsidiary of the acquirer. b) Article 23(1) of Directive 2013/36/EU (CRD) details an exhaustive list of five criteria against which the proposed acquisition is assessed: the reputation of the proposed acquirer, the reputation and experience of the proposed new managers, the financial soundness of the acquirer, the impact on the targeted credit institution and its effective supervision and, lastly, the risk of links to money laundering or terrorist financing. In addition, Article 23(2) provides for a procedural ground for opposition: if the information provided is incomplete. These criteria are harmonised at EU level and a proposed acquisition can only be assessed against them. Additionally, these criteria mainly focus on the target credit institution and the proposed acquirer. As mentioned by the Commission in its Report on the Application of Directive 2007/44/EC as regards procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector (COM(2013) 64 final), financial stability as such is not explicitly stated amongst the assessment criteria, but it is implicitly addressed by the assessment criteria of financial soundness and capability of complying with prudential requirements, which both have a forward looking element. c) Competent authorities cannot refuse to make a decision and the assessment should not take longer than 60 working days. If additional information is needed, this period can be suspended up to 20 working days (or 30 working days if the proposed acquirer is situated in a third country or is not subject to supervision). Subparagraph 2 of Article 22(3) CRD specifies that any further requests shall be at the supervisor’s discretion, but they can no longer be treated as suspensions. If the competent authorities do not oppose the proposed acquisition within the assessment period, it shall be deemed to be approved. Disclaimer:  This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General for Financial Stability, Financial services and Capital Markets Union) has prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.