CRD VI and the new framework for third-country bank branches

A third-country undertaking generally has to establish an authorised branch, or a subsidiary, before providing core banking services in a Member State.1

The third-country branch regime that goes with it sets requirements on authorisation, capital endowment, booking arrangements, governance and reporting for the branch itself.3

The directive sets 11 January 2027 as the date from which Member States must apply the measures transposing the third-country branch provisions. That is later than the date the rest of CRD VI applies from.2

The requirement still reaches firms through a national measure. Whether the Member State you care about has transposed it, and on what terms, is a national question, so planning against the directive alone gets the timing wrong in either direction.2

The same article sets out exceptions, including services provided at the exclusive initiative of the client and investment services and activities covered by MiFID II. It is not a blanket ban on cross-border provision.1

Establishing where the activity did not require it is a real cost, so the exceptions are worth working through before committing to a branch.

A third-country branch is authorised by, and confined to, one Member State. It is not a Union authorisation and it does not passport, so a bank targeting several Member States is comparing several branches against one subsidiary.34

A subsidiary means a full credit institution authorisation, with its head office in the same Member State as its registered office.5