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Summaries of EU Legislation

Single supervisory mechanism framework regulation

SUMMARY OF:

Regulation (EU) No 468/2014 on establishing the framework for cooperation between the European Central Bank and national competent authorities within the single supervisory mechanism (SSM framework regulation)

WHAT IS THE AIM OF THE REGULATION?

  • The SSM framework regulation sets out the legal framework on cooperation within the single supervisory mechanism1 (SSM). It contains operational arrangements for the implementation of supervisory tasks and responsibilities of the European Central Bank (ECB) in its supervisory capacity and the national competent authorities2 (NCAs).
  • It sets out the methodology for the supervision of SSM-supervised entities and their classification as either significant or less significant.

KEY POINTS

The SSM is one of the two pillars of the EU banking union, alongside the single resolution mechanism3 (SRM).

The regulation complements Regulation (EU) No 1024/2013, known as the SSM regulation, which established the SSM. The SSM comprises the ECB and the NCAs of the participating EU Member States.

Scope

The regulation covers both the practical arrangements for cooperation between the ECB and NCAs and the detailed rules on organisational matters, administrative procedures and sanctions, which include the following.

  • Organisation of the SSM. Providing the procedures underpinning the responsibilities given to the ECB and the NCAs, for example.
  • Operation of the SSM. Carried out by the ECB and the NCAs, including due process for adopting ECB supervisory decisions and reporting of breaches.
  • Procedures for cooperation. Establishing cooperation between the ECB, NCAs and national designated authorities4 on macro-prudential tasks and tools.

A key part of the SSM framework regulation is the methodology for the assessment and review of a supervised entity and its classification as significant or less significant, along with the arrangements resulting from this assessment.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since .

BACKGROUND

For more information, see:

KEY TERMS

  1. Single supervisory mechanism. An EU system of banking supervision composed of the ECB and the NCAs, which gives the ECB direct supervisory powers over banks based in Member States participating in the SSM.
  2. National competent authorities. A public authority or body competent by national law to supervise institutions as part of the supervisory system in operation in the Member State concerned.
  3. Single resolution mechanism. An EU system to deal efficiently with failing banks.
  4. National designated authorities. The relevant authorities indicated by the relevant Member States to work with the ECB on implementing the SSM regulation – they are often the national central banks, but may also be the national financial supervisory authorities.

MAIN DOCUMENT

Regulation (EU) No 468/2014 of the European Central Bank of establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, , pp. 1–50).

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