Approval requirement for financial holding companies

Rationale for the approval requirement

In banking groups with a holding company as the parent, the application of prudential requirements under the CRD V is based on the consolidated situation at the level of the holding company. In order to ensure that the consolidated requirements are met by the entire banking group, an approval requirement has been introduced for these holding companies. This brings holding companies directly within the scope of supervisory powers under the CRD and the Capital Requirements Regulation (CRR), so that they can be held directly responsible for compliance with consolidated prudential requirements.

Scope of the approval requirement

The approval requirement is regulated in Section 3:280a of the Financial Supervision Act (Wet op het financieel toezicht – Wft). The approval is granted if the conditions of Section 3:280b of the Wft are met. The approval requirement as implemented in the Wft applies to the following holding companies:

• Dutch-based (mixed) financial holding company. A holding company having its registered office in the Netherlands, which is not a subsidiary of a Dutch bank or Dutch investment firm or of another holding company having its registered office in the Netherlands.
• Dutch-based (mixed) financial EU parent holding company. A holding company which is not a subsidiary of a bank or investment firm licensed in another EU Member State or of a holding company having its registered office in another EU Member State.
• Other (mixed) financial holding company having its registered office in the Netherlands. A holding company which must comply on a sub-consolidated basis with the prudential rules laid down by the Wft and the CRR.

Competent authority

The approval is granted by the holding company's consolidating supervisor. If the consolidating supervisor is not also the competent authority of the Member State where the holding company has its registered office, the approval must be given jointly by the consolidating supervisor and the competent authority of the Member State where the holding company has its registered office. In the case of a banking group headed by a less significant bank having its registered office in the Netherlands, DNB is usually the consolidating supervisor. In the case of a banking group headed by a significant bank having its registered office in the Netherlands, the ECB is usually the consolidating supervisor.

Exemption

DNB has the power to exempt a holding company from the approval requirement if it meets the conditions of Section 3:280c of the Wft. If an exemption is granted, a bank that is part of the same group as the holding company must be designated as the party responsible for compliance with the prudential requirements that apply on a consolidated basis. In making our assessment, we also consider whether there is any impediment to effective supervision on a consolidated basis.

The exemption conditions apply on an ongoing basis. This means we will withdraw the exemption if the conditions for exemption are no longer met.

Application for approval/exemption

A holding company that is the parent company of a less significant bank can apply for approval or exemption in the Digital Reporting Portal (Digitaal Loket Toezicht – DLT), by completing the relevant form and uploading all required documents. A holding company that is the parent company of a significant bank must apply for approval or exemption from the ECB.

Please note: a holding company that applies for approval but also intends to acquire or expand a qualifying holding in a bank must also submit an application for one or more declarations of no-objection (DNO) together with the application for approval. More information about DNO applications.

Transitional provision

Holding companies already in existence on 27 June 2019 (the day before the Directive amending the CRD entered into force) must apply for approval or exemption by 28 June 2021.

Contact

If you have any questions about your application for approval or exemption, please contact your DNB account supervisor.