🎧 The EU is tightening its regulatory framework for international banks. In this episode, Renate Prinz explains what BRUBEG means for third-country banks and why institutions should prepare now. – Tune in now!
New rules for third-country banks
Germany is implementing the European CRD VI through the Banking Directive Implementation and Bureaucracy Relief Act (BRUBEG). One of the most significant changes affects banks whose head office is located outside the European Union or the European Economic Area.
In this episode of “Alles Legal – Fintech-Recht kompakt”, Dana Wondra from Payment & Banking speaks with Renate Prinz, Partner at Annerton and author at PayTechLaw, about the upcoming regulatory framework and its impact on cross-border banking activities.
Why the EU is introducing stricter requirements
The new framework aims to increase transparency while ensuring a level playing field between EU institutions and banks established outside the Union.
Previously, many third-country banks were able to provide banking services directly from abroad with only limited supervisory oversight within Europe. Under CRD VI, these institutions will become much more closely integrated into the European supervisory framework.
When subsidiaries or branches become mandatory
Depending on the scale and significance of their EU activities, third-country banks may be required either to establish an EU subsidiary or to operate through a supervised branch.
The applicable requirements depend on factors such as business volume, services provided and the institution’s importance to the European market.
Larger operations will also face more demanding requirements relating to capital, liquidity, governance and local management responsibilities.
Reverse solicitation remains available
Cross-border banking is not prohibited altogether.
Under the concept of reverse solicitation, customers may still approach non-EU banks on their own initiative. However, supervisors are expected to examine much more carefully whether the customer genuinely initiated the relationship or whether the institution actively marketed its services within the EU.
Even a German-language website may become a relevant indicator during supervisory assessments.
Equivalence assessments and the 2027 deadline
Another important element is the equivalence assessment, under which European authorities evaluate whether a third country’s supervisory regime is comparable to EU standards.
Countries such as Switzerland and the United Kingdom are generally regarded as closely aligned with European regulation, whereas assessments for other jurisdictions may prove considerably more complex.
The new requirements will apply from January 2027. Institutions should therefore begin assessing their regulatory obligations well in advance, particularly where licensing procedures or structural changes may be required.
Conclusion
BRUBEG significantly reshapes the regulatory environment for third-country banks operating in Europe. International institutions should review their EU strategy now and prepare for the new supervisory expectations before the new regime becomes fully applicable.
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About this podcast
Alles Legal – Fintech Recht Kompakt delivers sharp, weekly insights into legal and compliance matters in the world of banking. (in German only)
This podcast is a collaboration between Payment & Banking and PayTechLaw.
Each Wednesday, we unpack the legal developments shaping the financial world – clearly, concisely, and without the legal jargon.
Since 2021, PayTechLaw authors and Annerton attorneys have brought depth and clarity to complex topics.
Whether it’s PSD3, DORA, or FiDA – we provide the legal context you need.
In 20 minutes. No detours.
