Directive 2024/1619 - Amendment of Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks - Main contents

Official Journal

of the European Union

EN

L series

2024/1619

19.6.2024

The purpose of the amendments to Directive 2013/36/EU of the European Parliament and of the Council (3) in connection with supervisory powers, sanctions, third-country branches, and environmental, social and governance (ESG) risks is to further the harmonisation of the banking supervisory framework and, ultimately, deepen the internal market for banking. Competent authorities should seek to ensure that the supervisory framework is applied to institutions, as defined in that Directive, in a proportionate manner and, in particular, they should aim to reduce compliance and reporting costs for small and non-complex institutions to the extent possible, having due regard to the recommendations set out in the report entitled ‘Study of the cost of compliance with supervisory reporting requirements’ published by the European Supervisory Authority (European Banking Authority) (EBA) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (4) in 2021, which targeted an average reduction of reporting costs of 10 % to 20 %.

Competent authorities, their members of staff and the members of their governance bodies should be independent and free from political and economic influence. Risks of conflicts of interest undermine the integrity of the Union financial system and harm the goal of an integrated banking and capital markets union. Directive 2013/36/EU should lay down more detailed provisions for Member States to ensure that the competent authorities, including their members of staff and the members of their governance bodies, act independently and objectively. In that context, minimum requirements should be laid down to prevent conflicts of interest and limit ‘revolving doors’, providing, in particular, for cooling-off periods, a prohibition on trading instruments issued by supervised entities, and a maximum tenure period for relevant members of governance bodies. EBA should issue guidelines addressed to competent authorities on the prevention of conflicts of interest which are based on international best practices.

Members of staff and members of the competent authority’s governance body subject to cooling-off periods should be entitled to appropriate compensation, the purpose of which should be to compensate them for the inability to take up employment, for a certain period, with entities in relation to which those cooling-off restrictions apply. The compensation should be proportionate to the length of the relevant cooling-off period and its form should be decided by each Member State.

Supervisors should act with the utmost integrity in the exercise of their supervisory functions. In order to increase transparency and ensure high ethical standards, it is appropriate for members of staff and members of the competent authority’s governance body to submit a declaration of interests on an annual basis. That declaration should disclose information on the member’s holdings of financial instruments in order to reduce the risks arising from conflicts of interest that might...