Capital Requirements Directive (CRD) 2024/1619

Directive of the European Parliament and of the Council (EU) 2024/1619 (CRD) Capital Requirements Directive of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third country branches and environmental, social and governance risks. In the consolidated version of the CRD Directive, ESG factors are addressed, for example, in Article 3, paragraph 1, point 68 and point 69; Article 73; Article 74; Article 76; Article 87a; Article 91; Article 98; Article 100; Article 104 (the list does not represent an exhaustive calculation).

This Directive shall enter into force on the twentieth day following its publication in the Official Journal of the European Union. Article 1 point 44 letter c) and Article 1 point 45 letter c) are applied from July 29, 2024.

Publication date

19. 6. 2024

This directive aims to strengthen the integrity of the financial system of the Union a harmonization of the regulatory framework for credit institutions. It introduces measures to:

• Avoiding conflicts of interest:
  • The Directive emphasizes the independence of competent authorities, their employees and members of administrative and management bodies.
  • Misleading minimum requirements for avoiding conflicts of interest, such as waiting periods for employees and members of administrative and management bodies before employment with supervised entities, prohibition of trade in instruments issued by supervised entities and maximum tenure period for the relevant members of the administration and management bodies.
  • Employees and members of bodies subject to waiting periods are entitled to adequate compensation.
  • An obligation is introduced submit declarations of interests for employees and members of administrative and management bodies.
• Strengthening the supervision of branches from third countries:
  • It is introduced request for permission for businesses from third countries that want to provide main banking services in the Union.
  • These businesses must establish at least a branch in a member state, which will have authorization in accordance with Union law.
  • The directive stipulates framework for branches from third countries, including them classification, capital equipment, liquidity requirements a internal administration and management.
• Tightening of penalties for violations:
  • The Directive requires Member States to lay down effective, proportionate and dissuasive administrative sanctions, regular penalties a other administrative measures for violating the directive and related regulations.
  • It is introduced harmonized calculation of total net annual turnover for the purpose of determining the correct monetary sanctions.
  • The directive allows cumulation of administrative and criminal sanctions for the same violation.
• Strengthening of management and control requirements:
  • Security measures are in place diversity of governing bodies, in terms of age, gender, geographic origin and education and professional experience.
  • Institutions and financial holding companies are responsible for assessment of the suitability of members of the governing bodies, which are subsequently verified by the competent authorities.
  • An option is introduced preliminary suitability assessment potential members of governing bodies.
  • Institutions must develop individual statements of responsibility and overviews of duties for members of governing bodies, senior management and persons holding key positions.
• Simplification and harmonization of procedures:
  • The directive clarifies and simplifies the procedures activation of the systemic risk cushion.
  • It is introduced the obligation to take into account the principle of proportionality when developing technical regulations and guidelines.

The directive also regulates some aspects concerning merger and fusion, division a significant transfers of assets and liabilities.