EBA consults on scope of its draft guidelines on connected clients under Article 4 (1) (39) of Regulation (EU) No 575/2013

MiFID Firms

Date: 28 June 2017

On 25 May 2017, the European Banking Authority (EBA) launched a consultation focusing on the scope of its draft Guidelines on connected clients, on which it had already sought the stakeholders' views in July 2016. In the consultation, the EBA proposed to extend the scope of the draft Guidelines to the remaining aspects of the Capital Requirements Regulation (CRR), the EBA technical standards, and the EBA guidelines where the concept of group of connected client is relevant. The extension of the scope would ensure the consistent application of this concept throughout the CRR and the harmonisation of institutions' practices. The consultation will run until 26 June 2017.


In the draft guidelines the EBA provides guidance on two types of interconnection, i.e. control relationships and economic dependencies, which lead to the formation of groups of connected clients. In its first consultation document, the EBA proposed that the Guidelines on connected clients should apply only in the context of the large exposures regime.


However, the concept of ‘group of connected clients' is also used in other areas of the CRR, such as the categorisation of clients in the retail exposure class for the purposes of credit risk, the development and application of rating systems, the specification of items requiring stable funding for the purposes of reporting, and the application of the SME supporting factor. In addition, this concept is also used in other EBA technical standards and guidelines.


Respondents to the first consultation have, therefore, raised questions and comments on the scope of application of the Guidelines, as it was restricted to the large exposures regime.


In this second consultation, the EBA is considering to extend the scope of the draft Guidelines to the remaining aspects of the CRR, the EBA technical standards, and the EBA guidelines where the concept of ‘group of connected client' is relevant and would like to understand the possible impact in terms of institutions' practices and capital requirements.

Consultation process

‎Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. All contributions received will be published following the close of the consultation, unless requested otherwise, and will be considered in the finalisation of the guidelines on connected clients together with the comments received during the first consultation. Please note that the deadline for the submission of comments is 26 June 2017.

Legal basis and background

In light of the new provisions laid down in the CRR as well as in the- EBA technical standards and guidelines in the area of large exposures, the EBA decided to review the 2009 CEBS ‘Guidelines on the implementation of the revised large exposures regime' and to focus exclusively on the issue of connected clients under Article 4(1)(39) of the CRR.