EBA releases draft Regulatory Technical Standards on requirements for qualifying holdings in ART issuers

Recently, the European Banking Authority (EBA) published three sets of final draft RTS and one set of final draft Implementing Technical Standards (ITS) related to ARTs. These drafts provide guidelines for the assessment of qualifying holdings in issuers of ARTs and outline the procedure for the approval of white papers for ARTs issued by credit institutions under MiCAR.

This article focuses on the first set of final draft RTS, which addresses the assessment of proposed acquisitions of qualifying holdings in ART issuers.

The EBA report outlines the draft RTS mandated by Article 42(4) of MiCAR (Regulation (EU) 2023/1114). These standards specify the detailed information required from entities seeking to acquire qualifying holdings in issuers of ARTs. The draft RTS is applicable to both proposed acquirers and competent authorities. It outlines the information they must receive to evaluate the proposed acquisition based on the five criteria defined in Article 42(1) of MiCAR:

1. Reputation and competence of the acquirer.
2. Suitability of proposed management for the ART issuer (if applicable).
3. Financial health of the acquirer.
4. Compliance of the ART issuer with financial regulations.
5. Potential money laundering or terrorist financing risks associated with the acquisition.

The draft RTS translates these five assessment criteria into specific information requirements, including the following:

• Acquirer background: Information on the acquirer's identity, integrity, financial health and any existing financial or non-financial interests in the target ART issuer.
• Management qualifications: If the acquirer plans to appoint new management for the ART issuer, the RTS requires details on the proposed managers' reputation, knowledge, skills and experience.
• Acquisition details: Information on the proposed acquisition, including the acquirer's strategy and the expected group structure post-acquisition.
• Funding sources: Details of the legitimate origin of the funds used for the acquisition, including details of any asset sales and the transfer channels used by the acquirer.

Proportionality in the RTS

The principle of proportionality is embedded in the RTS, ensuring that the information required is appropriate to the nature of the acquisition. This is reflected in two key ways:

1. Indirect acquisitions: The amount of information required from indirect shareholders depends on the control structure. Less information is needed if the acquirer is taking control of an existing qualifying holder, or if the qualifying holding is part of a complex ownership chain.
2. Reduced information burden: In specific cases, a reduced set of information can be submitted. This applies when the acquirer has been assessed by the same authority within the past two years or is already authorised and supervised by the same authority as the target entity.

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