General considerations
The SREP assessment should focus on the TCB’s material risks and how these are dependent on the business, and the risk profile of the rest of the group and how they are managed. Recognising the status of the branch and its reliance on the third-country parent, the assessment should also focus on whether the branch has sufficient independence in its governance and risk management to act in the best interests of the branch, safeguarding its safety, soundness and viability, and its capacity to fulfil its commitment to clients and counterparties within the Member State where they have been authorised to carry out business.
To inform the assessment, competent authorities should take into account the results of the independent third-party assessment of the branch and the independent opinion on compliance with booking requirements mandated by Articles 48g(8) and 48h(3) of Directive 2013/36/EU, respectively. They should also cooperate with the authority responsible for supervision of the head undertaking (‘the home authority’) in accordance with administrative or other arrangements in accordance with Article 48c(2) of Directive 2013/36/EU and take into account the results of the home authority’s supervisory assessments of the branch where available.
Competent authorities should ensure that the scope of the assessment contains measures to identify TCBs of systemic importance or posing financial stability risks. Further, the assessment should enable identification of TCBs for which authorisation in accordance with Title III, Chapter 1 of Directive 2013/36/EU (as a subsidiary) may be appropriate. Competent authorities should refer to Article 48i for criteria to consider in this regard.
Where the review of the TCB’s governance, business model, or activities, gives competent authorities reasonable ground to suspect that, in connection with the TCB, money laundering or terrorist financing is being or has been committed or attempted, or that there is increased risk thereof, the competent authority is required to immediately notify the EBA and the TCB’s AML/CFT supervisor in accordance with Article 48n(4) of Directive 2013/36/EU.