EBA · 2018_4279 Rejected question

Definition of credit institution

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
4, para. 1
Topic
Other issues
Submitted by
Other
Submitted
2018-09-18
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Question

Is the definition of credit institution as stipulated by the CRR fulfilled, if a company operates in the area of credit granting while its holding company issues corporate bonds ultimately listed to the open market?   More precisely, does the issuance of bonds by a holding company, first as a private placement but ultimately listed in the open market, whose subsidiary operates in the area of credit granting  qualify  as “continuing issuing repayable funds”, or is this activity are exempted from the scope, e.g. based on the CRD IV, recital 14?

Background

An entity has gained a creditor license according to a Member State’s laws. The holding company of the Group companies (including the abovementioned entity), issued corporate bonds. According to its publication, the holding company issued bonds at par with an annual interest rate and the new bonds are expected to be included in the Open Market on a stock exchange. An application to list the bonds to trading on the Regulated Market will be done within 4 months thereafter. The bonds were targeted to professional investors only, but as the issuer intends to list them to trading on the Regulated Market, the bonds shall be publicly available and tradeable.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2018_4279

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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