Decisions On Ireland's Exercise Of National Discretions Under CRD VI

In Q1 2025, the Irish Department of Finance (Department) publicly consulted on the transposition of the national discretions under CRD VI.

The Department received a number of submissions in response and, in January 2026, published its decisions following consideration of those submissions. The consultation questions and decisions are outlined below.

Background

The Capital Requirements Regulation (CRR) III and the Capital Requirements Directive ((EU) 2024/1619) (CRD VI) were published in the Official Journal of the European Union on 19 June 2024.

In addition to Basel III implementation proposals, the capital requirements package contained EU-specific measures, including proposals to harmonise the regulatory framework governing third-country branches in Member States, which is currently a national competence.

The Regulation was implemented on 1 January 2025, and the Directive has a transposition date of 10 January 2026. As of the date of writing, notwithstanding that the transposition deadline has passed, Ireland and several other EU Member States have not yet transposed CRD VI.

National Discretions

Discretion 1 – Article 4a(4)

The Directive allows for Member State discretion regarding the cooling-off period for members of staff of competent authorities. Member States may allow competent authorities to subject their members of staff  and members of their governance bodies to a cooling-off period in the event of their hiring by direct competitors of one of the entities referred to in paragraph 3, point (b)(i) of the Article (i.e. institutions with which the member of staff or the member of the competent authority's governance body has been directly involved for the purposes of supervision or decision-making, including the direct or indirect parent undertakings, subsidiaries or affiliates of those institutions). For those purposes, the length of the cooling-off period shall be no less than three months for members of staff directly involved in the supervision of those entities and no less than six months for members of the competent authority's governance body.

Question 1:  Should Ireland exercise this discretion to allow competent authorities to subject their members of staff and members of their governance bodies to a cooling-off period in the event of their hiring by direct competitors?

Decision: The Department has confirmed that Ireland will not exercise this discretion.

Discretion 2 – Article 4a(5)

The Directive allows for Member State discretion regarding the length of the cooling-off period for members of staff of competent authorities directly involved in the supervision of institutions.

Member States may allow competent authorities to apply shorter cooling-off periods of a minimum of three months for the members of staff directly involved in the supervision of institutions, only where a longer cooling-off period:

• would unduly restrict the ability of the competent authority to hire new members of staff with the adequate or necessary skills to exercise its supervisory functions, in particular taking into account the small size of the national labour market; or
• would constitute a breach of any relevant fundamental right recognised in the Constitution of the Member State concerned, of the Charter of Fundamental Rights of the European Union, or of any relevant workers' rights as set out in national labour law.

Question 2:  Should Ireland exercise this discretion to allow competent authorities to apply shorter cooling-off periods for the members of staff directly involved in the supervision of institutions?

Decision: The Department has confirmed that Ireland will exercise this discretion.

Discretion 3 – Article 48a(4)

The Directive allows Member States discretion in applying requirements for branches of third-country undertakings authorised in their territory. Member States may apply to branches of third-country undertakings authorised in their territory, or to certain categories thereof, the same requirements that apply to EU credit institutions authorised under CRD, instead of the branch-specific requirements set out in Title VI of CRD VI.

Question:  Should Ireland exercise this discretion to apply to branches of third-country credit undertakings, or to certain categories thereof, the same requirements that apply to credit institutions?

Decision: The Department has confirmed that Ireland will not exercise this discretion.

Comment: The Department has chosen not to exercise a discretion, which would apply more onerous requirements (i.e. requirements applying to EU credit institutions authorised under CRD) to branches of third-country undertakings authorised in Ireland, than the branch requirements set out in Title VI of CRD VI.

Discretion 4 – Article 66(2)

Article 66 of CRD covers administrative penalties, periodic penalty payments and other administrative measures for breaches of authorisation requirements and requirements for acquisitions or divestiture of material holdings, material transfers of assets and liabilities, mergers or divisions.

Member States may set a higher maximum amount for periodic penalty payments to be applied per day of breach and can, by way of derogation, apply periodic penalty payments on a weekly or monthly basis instead of daily.

In that case, the maximum amount of periodic penalty payments to be applied for the relevant weekly or monthly period when a breach takes place shall not exceed the maximum amount of periodic penalty payments that would apply on a daily basis for the relevant period.

Question:  Should Ireland exercise the discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach? In addition, should Ireland exercise the discretion to apply periodic payments on a weekly or monthly basis?

Decision: The Department has confirmed that Ireland will not exercise the discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach and will  exercise the discretion to apply periodic payments on a weekly or monthly basis.

Discretion 5 – Article 67(2)

Article 67 of CRD covers other provisions  (e.g. certain additional circumstances where administrative penalties, periodic penalty payments and other administrative measures for breaches may apply).

Similar to discretion 4 above, the Directive allows for Member State discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach. The Directive also allows for Member State discretion to apply periodic payments on a weekly or monthly basis instead of daily.

In that case also, the maximum amount of periodic penalty payments to be applied for the relevant weekly or monthly period when a breach takes place shall not exceed the maximum amount of periodic penalty payments that would apply on a daily basis for the relevant period.

Question: Should Ireland exercise the discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach? In addition, should Ireland exercise the discretion to apply periodic payments on a weekly or monthly basis?

Decision: The Department refers to the response under Discretion 4, in relation to which it has confirmed that Ireland will not  exercise the discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach and will exercise the discretion to apply periodic payments on a weekly or monthly basis.

Discretion 6 – Article 76(1)

The Directive allows for Member State discretion to allow the management bodies of small and non-complex institutions to review the strategies and policies for taking-up, monitoring, managing and mitigating relevant risks every two years.

Member States shall ensure that the management body approves and at least every two years reviews the strategies and policies for taking up, managing, monitoring and mitigating the risks the institution is or might be exposed to, including those posed by the macroeconomic environment in which it operates in relation to the status of the business cycle, and those resulting from the current and short-, medium- and long-term impacts of environmental, social and governance (ESG) factors.

Question:  Should Ireland exercise this discretion to allow the management bodies of small and non-complex institutions to review the relevant strategies and policies every two years?

Decision: The Department has confirmed that Ireland will  exercise this discretion.

Discretion 7 – Article 91(1a)

The Directive allows Member State discretion, under certain conditions, to allow the suitability assessment of members of the management body to take place after the newly appointed members have taken up their position.

Entities shall ensure that members of the management body fulfil at all times certain criteria and requirements set out in CRD and shall assess the suitability of members of the management body taking into account supervisory expectations, before they take up their position. However, where the majority of the members of the management body is to be replaced at the same time by newly appointed members and this would lead to a situation where the suitability assessment of the incoming members would be carried out by the outgoing members, Member States may allow the assessment to take place after the newly appointed members have taken up their position.

Question 7: Should Ireland exercise this discretion to allow the suitability assessment of members of the management body to take place after the newly appointed members have taken up their position?

Decision: The Department has confirmed that Ireland will not  exercise this discretion.

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