Ireland Transposes CRD VI and Article 21c – Third Country Branch Requirement

What You Need to Know

The statutory instrument transposing the Capital Requirements Directive (EU) 2024/1619 (“CRD VI”) into Irish law has been published. In this update we look at what this means, and where this might bite from a transactional perspective in the Irish market.

CRD VI

CRD VI¹ is the latest iteration of the EU Banking Directive/Regulation package and amends the Capital Requirements Directive (“CRD”).²

The European Union (Capital Requirements) (Amendment) Regulations 2026 (the “Amending Regulations”)³ transpose CRD VI into Irish law. They were published on 14 July 2026 and came into effect on 10 July 2026.

The Third-Country Branch Requirement

One of the key changes introduced by CRD VI is that certain entities established in a third country that carry out ‘core banking’ activities in a Member State must establish an authorised branch in that Member State (the “Third-Country Branch Requirement”). Regulation 9L of the Amending Regulations transposes the Third-Country Branch Requirement in Article 21c of CRD VI into Irish law.

The core banking services, which trigger the Third-Country Branch Requirement, are accepting deposits (or other repayable funds), lending including, inter alia: consumer credit, credit agreements relating to immovable property, factoring, with or without recourse, financing of commercial transactions (including forfeiting), and providing guarantees/commitments.

All third-country firms offering deposit-taking or other repayable funds are in scope, regardless of their own regulatory status. All third-country firms who would be considered
credit institutions if established in the European Union (as per the definition in CRD) are in scope in relation to lending and guarantees activities.

So, the Third-Country Branch Requirement will not apply to funds, insurance undertakings and other entities whose business activities would not render them a CRD credit institution if conducted within the EU. As such, private credit remains largely unaffected.

Transposition Text

There has been a lot of discussion amongst industry bodies and participants across the finance and the funds sectors (the latter, in the context of fund financing and custody/sub-custody arrangements which engage core banking services) around whether the transposition text would include any language to clarify when a core banking service is to be considered “carried out” in Ireland.

The Amending Regulations follow the wording of CRD VI faithfully, which should allow in-scope banking service providers to take a more standardised approach when dealing with Irish and other EU customers. However, they do not provide any further guidance on a number of issues relating to the Third-Country Branch Requirement, as noted below.

Carrying out core banking activities “in the State”

The Amending Regulations do not provide any guidance or parameters on what constitutes carrying out a core banking service “in the State” and this is a matter of some debate currently. If a “solicitation” test is applied, the sole determinant would be the location of the customer, meaning for example any lending to an Irish person triggers the branch requirement.

If, instead, a “place of characteristic performance” test is applied, the scope is determined by the location of the essential element of the service supplied.

Article 21c (as transposed by Regulation 9L) represents the first time Ireland has regulated lending to Irish corporates on a standalone basis. As such, whilst characteristic performance has been relied upon in Ireland on an occasional basis before, it is still a nascent doctrine and it is to be determined how the supervisory bodies and market will consider it applicable to the Third-Country Branch Requirement.

Although it pre-dates CRD VI and was published under different (domestic) law and in a different context, the Central Bank of Ireland has previously published a Dear CEO Letter in the context of the UK’s withdrawal from the EU on what might indicate that a third-country bank is carrying on “banking business” (the term which triggers Irish bank licensing under our domestic regime, the Central Bank Act 1971, which sits alongside the EU regime) in Ireland. Factors to consider included:

1. presence in Ireland;
2. marketing materials targeted at Irish customers;
3. having in place, or adapting, operational infrastructure or policies specifically to facilitate the provision of banking services to Irish-based customers;
4. the volume of the Irish customer base — a material number of customers in Ireland availing of a banking service provided by a credit institution authorised in another jurisdiction would be indicative of the conduct of banking business in Ireland; and
5. the classification of customers — a proportionally higher number of Irish-based retail customers would tend to indicate that such customers are being targeted.

As noted above, this Dear CEO letter pre-dated the Third-Country Branch Requirement, so it remains to be seen how the new provisions will be interpreted by the Central Bank of Ireland.

Returning to the legal text itself, it is noteworthy that the rationale paper for the original CRD VI proposal⁴ focused heavily on existing actual branch activity, then locally-regulated only, and on the perceived need to harmonise that at EU level.

Whilst commentary exists that the policy intent favoured a solicitation test, the entire scope of Article 21c was a matter of some debate during the CRD VI trilogue and, absent Central Bank of Ireland or EU-level guidance or further legislative action, the compromise legal text remains open to interpretation.

Timeline and Grandfathering

The Third-Country Branch Requirement applies generally from 11 January 2027.

In order to preserve rights acquired by customers under existing contracts, there is a grandfathering provision which means the Third-Country Branch Requirement will not apply to existing contracts that were entered into before 11 July 2026.

In the context of lending particularly, these arrangements may lose grandfathered status in taken when amending an otherwise in-scope loan facility and/or similar or related contracts.

Exemptions

Reverse solicitation

Reverse solicitation has some value as an exemption in specific contexts and ad hoc business or “once-off” engagements, subject to its strict criteria being met. However, as with other EU reverse solicitation exemptions, it is difficult to foresee it being relied upon on a robust basis to build or scale a business with Irish customers more broadly (in that sense, the above-mentioned Dear CEO Letter indicators are equally useful benchmarks to bear in mind).

In addition, the statement published by ESMA⁵ in 2021 highlights various other issues in relation to reverse solicitation. There is also a new reporting regime for third-country undertakings which are caught and rely on reverse solicitation, so there will be added transparency for EU regulators around the scale of this reliance and the contexts in which the exemption is used.

Intra-Bank Exemption

The Third-Country Branch Requirement does not apply where the client or counterparty receiving the service is a credit institution.

Intra-Group Exemption

The Third-Country Branch Requirement does not apply where the client or counterparty is an undertaking of the same group as the third-country undertaking. Given the regime itself primarily only applies to limited non-EU persons, the value of this exemption is quite limited (although useful in certain cases).

The MiFID Ancillary Services Exemption

The provision of cross-border investment services under the Markets in Financial Instruments Directive⁶ regime (“MiFID II”) remains unaffected. Pursuant to Regulation 9L(7), banking services such as lending, deposit taking and providing guarantees provided on an ancillary basis to core MiFID investment services and activities are also excluded from scope.

How we can help

We have been tracking the regime closely since the initial publication of the proposed directive through its trilogue period and final adoption negotiations, and now transposition. We are therefore well placed to analyse structures to see whether a structure or transaction is in scope, and then to consider solutions.

In terms of licensing options, while a branch might be the right solution for some institutions with significant enough business in a particular Member State – for example in Ireland, lending to leading Irish industries such as investment funds or aviation leasing – it is non-passportable.

We can assist with advising on key structural decisions that will now need to be contemplated by lender clients such as where transactions are being booked, which entities are providing the services and whether an EU entity can be utilised or established to provide the relevant services.

For pan-European business at scale, the only real option is to establish a fully authorised EU credit institution, given the limitations on a branch, and exemptions, described above. This requires lead in time and planning, and is a full-scale authorisation with a suite of prudential and conduct requirements applicable to an Irish bank. That needs to be factored into the commercial assessment of how to address the Third-Country Branch Requirement.

Structuring solutions can also be considered by lenders, such as lending through a third-country entity that is not a bank, lending to a non-EU borrower or using a financial instrument such as loan notes or others which do not constitute lending. A loan origination fund authorised under AIFMD 2 is another possible option in certain scenarios, and we expect rising activity in this area along with the continued growth of private credit more generally.

Our global network and strategic focus on the core finance and investment fund centres and client base means that we have a unique and deep perspective on the advisory questions to be determined and the challenges and opportunities that CRD VI and Article 21c present to global credit markets, as well as the ability to advise, implement and support structuring and licensing solutions.

Key Contacts

Should you wish to discuss any aspect of the above, please reach out to your usual Maples Group contact or any of the persons listed.

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¹ Directive (EU) 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks.
² Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms
³ https://www.irishstatutebook.ie/eli/2026/si/326/made/en/pdf
⁴ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52021PC0663
⁵ https://www.esma.europa.eu/sites/default/files/library/esma35-43-2509_statement_on_reverse_solicitation.pdf
⁶ Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments