EU View Bulletin – May 2025

We are delighted to share with you the latest EU View Bulletin. Here you will find insights and information about the latest intel we have gathered across the EEA jurisdictions on the transposition of Article 21C of CRD6. As a reminder, the provisions of Article 21C come into force on 11 January 2027 and the requirements must be transposed into national law by 10 July 2026. To assist you, our Quick Reference Guide, which is included in the EU View subscription, gives an overview of the implementation progress in the Member States. In addition, we will soon be launching CRD6 Manager, a new subscription service tracking implementation of CRD6 articles centrally as well as in key EU jurisdictions. We have included more detail below and, as always, we would be very happy to provide further information on the EU View subscription, our CRD6 solutions and the wider cross-border offering, so please contact us, by replying to this email, if you are interested in any of these areas.

As with everything we do, the output is best when we get continuous feedback – please contact us at euview@simmons-simmons.com to let us know what we can do to enhance EU View or if you would like us to cover specific issues in this Bulletin.

EU View – CRD6, Article 21C Insights and Transposition Developments – May 2025

CRD6, Article 21C Insights

In this month’s Bulletin, in addition to setting out the latest developments in the Member States, we are taking a closer look at grandfathering, i.e. the existing contracts exemption under Article 21C(5) of CRD6. The purpose of this provision is to “preserve clients’ acquired rights under existing contracts” by excluding the application of the third country branch requirement to existing contracts entered into before 11 July 2026. It is therefore possible to make a working assumption that, where Article 21C(5) is implemented into national legislation without change, deposits, loans and guarantees and commitments that are entered into before 11 July 2026 can continue after that date. It is important to note that this is different to the grandfathering analysis for the purposes of Brexit because CRD6 contains an express saving provision for existing contracts and “acquired rights” and provides a more robust footing on which legacy contracts can continue. At the time of Brexit, there was no such clear direction, and the position had to be established by relying on a conservative interpretation of the law in each individual Member State in the face of such uncertainty.

In the case of lending, for example, the grandfathering clause should allow loans that have been drawn down to continue to be serviced and it seems likely that additional drawings under pre-existing loan facilities would also benefit from the exemption as there is the need to preserve clients’ “acquired rights”, which should be interpreted to mean the right to further drawdowns. It is also likely that the exercise of committed accordions and rollovers of debt under revolving credit facilities will benefit from grandfathering as both would have been in the contemplation of the parties from the outset.

The best outcome for market participants would be if legacy contracts are allowed to continue in their entirety, and it should equally be in the Member States’ interests to avoid disruption of banking services in the jurisdiction if such contracts were not to survive past 10 July 2026. However, the extent to which grandfathering will provide relief from the branch licensing requirement in each Member State will need to be examined once CRD6 is implemented into national legislation. We note in this context the EU Commission’s comments in October 2024 that this is a “phasing out” regime rather than a grandfathering regime and recital 6 of CRD6 warns Member States against construing this provision too widely, stating that measures taken to preserve clients’ acquired rights should apply “solely for the purpose of facilitating the transition to implementation of this Directive, and should be narrowly framed to avoid instances of circumvention”. With that in mind, we cannot rule out further guidance from the EBA or the legislators nationally which may, for example, look to distinguish material changes (such as restatements of existing contracts, increasing commitments under existing loan facilities or extending the contractual term) from “acquired rights” under the legacy contract. In our view, this is a key area where Member States and local regulators should be encouraged to follow a generous interpretation and where there is an opportunity for advocacy.

We are closely monitoring local developments with counsel and will flag any updates as we get them.

Although the pace of transposition remains slow, we have already had a few examples of different approaches in Denmark, the Netherlands and the Czech Republic:

• The Danish draft text of the implementation law includes a grandfathering clause stating that contracts entered into before 11 July 2026 will not be affected by the third country branch requirements, but the provision is silent on whether continued performance under such contracts after that date would constitute a breach of the law. Further, the grandfathering clause is limited to contracts under Danish law, while, in practice, most cross-border lending agreements involving Danish borrowers are governed by English or New York law. As part of the ongoing consultation process on the draft legislation, these concerns regarding the scope and effectiveness of the grandfathering provision have been formally raised with the Danish FSA for their consideration.
• The draft legislation in the Netherlands does not include a grandfathering clause at all. It is not clear whether this is the legislator’s intention or an omission. There have been a number of responses to the consultation which only closed on 28 May pointing out that this is an issue for the Dutch market, including from the banking Policy Institute (“BPI”) and the Loan Market Association (“LMA”) which requested that the position be reconsidered and grandfathering for legacy contracts expressly included in the law. Please see the next section for more detail on the consultation.
• The draft implementing legislation in the Czech Republic also does not specifically account for a grandfathering period. According to Czech counsel, the legislator has not provided reasons for the lack of the exemption although, according to counsel, based on prior regulatory practice in analogous instances in past, it may reasonably be assumed that the continuation of existing arrangements will be permitted to the extent of services already being provided. We will keep tracking further local development and let you know if there are any statement from the regulator clarifying its position in this regard.

CRD6, Article 21C Transposition Developments – what is the latest?

Looking across the Member States, this is what we have been hearing in the last month:

Czech Republic

The Czech draft law was recently passed on by the Chamber of Deputies to the Senate without substantive changes. This indicates that while further legislative amendments remain technically possible, they are considered unlikely at this stage. It is expected that the legislation will be adopted in the form approved by the Chamber of Deputies.

Denmark

As reported previously, draft legislation implementing CRD6 is currently undergoing the Danish legislative process and is now under consideration by the Danish Parliament’s Business Committee. A political discussion was held and a report submitted on 27 May 2025. The report is expected to be published shortly on the Danish Parliament’s website. According to the published timetable, the draft law is scheduled for a second reading on 3 or 4 June, with a final third reading expected on 11 June 2025. As noted in the Insights section above, there remains some uncertainty in the application of the grandfathering provisions in the draft Danish text.

Counsel have now clarified that the draft CRD6 implementing law contains a narrower version of the ancillary services exemption (also known as the “MiFID exemption”) as compared to the Article 21C text. The draft Danish text states that the exemption only applies to lending activities and not to other CRD6 activities such as deposit taking. Counsel is of the view that this may have been an oversight in the draft CRD6 implementing law and that it may not have been intended to gold-plate or deviate from CRD6. There are lobbying efforts to amend the draft CRD6 legislation, including from AFME, the Banking Policy Institute and the Loan Market Association, to align the ancillary services exemption more closely with the text of CRD6, in line with industry expectations.
We are closely following the local developments on these issues and will provide updates as we get them.

Finland

There is currently no draft legislation available, but a working group memorandum was published by the Ministry of Finance on 26 May 2025. This comprehensive memorandum outlines the proposed approach to the implementation of CRD6 (including Article 21C). Counsel is reviewing the (very extensive) document and we will provide updates in the next Bulletin.

Malta

On 9 May 2025, the Malta Financial Services Authority issued a Consultation Document on the ‘National Transposition of Directive (EU) 2024/16/19 and Implementation of Regulation (EU) 2024/1623 – the Banking Package’ (the “Consultation Document”). The Consultation Document is aimed at seeking feedback only in respect of the proposed transposition and implementation of national options and discretions in the CRD6 and CRR3 texts. The consultation is, therefore, only targeted at seeking industry feedback on the limited provisions in the CRD6 and CRR3 allowing Member States the option to take up the relevant requirement and does not address the transposition of all provisions of the CRD6. There is no mention specifically of any requirements relating to Article 21C.

Netherlands

On 30 April 2025, the Dutch Ministry of Finance launched a public consultation on the draft legislation implementing CRD which closed for responses on 28 May 2025. While the draft largely mirrors Article 21C, as discussed above, it excludes the grandfathering exemption currently provided under Article 21c(5) and appears to limit the Mifid ancillary exemption to ancillary activities that are directly related to the performance of and necessary to carry out Mifid services. While the reverse solicitation is included by reference, the Explanatory Memorandum issued by the Ministry of Finance suggests that the exemption should be applied more narrowly than under Article 21C(3).

There have been a number of responses to the consultation that can be viewed via the following link (in Dutch) Overheid.nl | Consultation on the Capital Requirements Implementation Act 2026, including from the Dutch Banking Association, the BPA and the LMA. In their joint letter (accessible here Overheid.nl | Consultatie Implementatiewet kapitaalvereisten 2026, reactie in English), the BPI and LMA specifically call for all three exemptions to be brought in line with Article 21C. Other related issue raised in the consultation by the Dutch Banking Association, is the transposition by reference of CRD6, Article 47(1) which, in their view, creates a confusion as to how the entities referred to in Article 47(1) should be determined using the concepts under the existing Dutch law.

We expect the legislator to publish feedback on the consultation responses in due course, and we will of course keep you informed whether any revisions are proposed.

Slovak Republic

According to publicly available materials, the consultations with the public related to the draft CRD6 legislation were expected to begin in March/April 2025 and during such process, the draft of the legislation would have been published. However, no such draft has been published so far. We understand from local counsel that the Slovak government is expected to deal with this legislation in June 2025, therefore draft legislation should be available by that time.

Slovenia

The Ministry of Finance has confirmed that a draft law for the CRD6 transposition is currently being prepared in cooperation with the Bank of Slovenia. It is expected to be submitted for public consultation in July 2025, with consideration in the National Assembly planned for autumn 2025.

Sweden

The Swedish government today, 30 May 2025, published the initial proposal regarding CRD6 implementation. The text (in Swedish) is available through the following link https://www.regeringen.se/contentassets/99835e082f77487aa4d9489752c63dfe/eus-bankpaket.pdf. Swedish counsel advised that the proposal will be subject to public consultation and the final draft text will be published at a later stage. No timeline has been communicated for the legislative process, other than the recognition in today’s draft that local law amendments implementing CRD6 will enter into force on 11 January 2026, with the rules on third country branches coming into effect on 11 January 2027. Counsel is starting the review of the draft proposal and we will bring you their observations and any news on the launch of public consultation in the next Bulletin.

We will keep you updated with new developments but if you have any questions in the meantime, please contact us at euview@simmons-simmons.com.

Our CRD6 Solutions

We can offer a range of solutions that focus on CRD6 in general and Article 21C specifically:

• The EU View service provides a Quick Reference Guide for each EU jurisdiction with an overview of the progress of implementation of the key provisions, including Article 21C. Also as part of this service, our Lending Guides will cover the licensing requirements specifically for lending activities and any impact in each Member State of national implementation of CRD6.
• The new CRD6 Manager will be tracking all articles in CRD as implemented centrally, such as EBA guidance, as well as locally in key EU locations. CRD6 Manager Lite will be focusing specifically on Article 21C. This service will keep subscribers updated on any pertinent issues e.g. what constitutes a service "in" a Member State, gold-plating, continued application of any local exemptions, local interpretation of exemptions. As part of the tool, we are providing an FAQ tracker with frequently asked questions we receive from clients, and which will provide views and advice from counsel on interpretation, implementation and application to various business lines and products.
• The navigator CRD6 tracker will cover high-level information of some of the key fundamentals and impacts on the navigator guidance and is available for all existing navigator subscribers.

All solutions will be updated on a monthly basis, and you will be notified of the latest changes in relation to CRD6.