ITS on cooperation for the purposes of direct supervision

Financial supervisors should collect data in 2026 to identify the first obliged entities to be assessed during the first selection process that will start no later than 1 July 2027. From the second selection process in 2030, the financial supervisors should, to the extent possible, use data that has been collected for other purposes, such as periodic risk assessment at the national level, to reduce the reporting burden on obliged entities and simplify the process. Where such data is not available, up to date or suitable, a dedicated data collection should be carried out.

To ensure the orderly and timely submission of information necessary for the selection process referred to in Article 12(1) of Regulation (EU) 2024/1620, the Authority should communicate with financial supervisors and, where applicable, publish the relevant details on deadlines, data exchange format specifications including data and metadata information, and related submission procedures to the Authority. The proactive dissemination of information should enable financial supervisors to adequately prepare and adhere to the reporting requirements. It should also enable financial supervisors to reuse the same or similar data‑exchange specifications and procedures for reporting from obliged entities to financial supervisors.

Reliable and accurate data is necessary to ensure a sound and equitable selection process. To ensure the quality and integrity of submitted information, it is essential to implement robust validation rules, quality checks and plausibility assessments prior to transmission to the Authority. Additionally, data quality also relies on having appropriate processes in place and applying expert knowledge when preparing and assessing the information to submit to the Authority.

Where the quality or reliability of specific data cannot be ensured, financial supervisors should accompany it with the justification provided by the obliged entity, such as the rationale for using proxies, estimates, or alternative methodologies. This approach ensures transparency regarding data limitations while allowing the continued transmission of the required information.

To ensure a transparent and accountable selection process of obliged entities for direct supervision, the Authority should clearly and without undue delay communicate the results of this process to the General Board in supervisory composition and selected obliged entities.

Selected obliged entities should be informed of their rights and obligations upon notification of the selection decision, including the possibility of judicial review under Union law, for legal certainty and procedural fairness.

The Authority should public the list of selected obliged entities on its website to ensure that the public can easily identify which obliged entities are under direct supervision of the Authority and provides those entities with clear and timely information about their status and applicable timelines, thereby promoting transparency and legal certainty. Following a selection process, the transfer of supervisory tasks and powers may occur from national level to the Authority and from the Authority back to national level. Reciprocal arrangements are thus essential for ensuring the continuity of supervision as well as the seamless continuation of pending supervisory procedures or investigations.

To ensure the continuity and effectiveness of supervision, the authority transferring supervision should provide the authority assuming supervision with all necessary information to enable a comprehensive understanding of the main risks and supervisory history associated with the obliged entity. This transfer of information is critical to allow the authority assuming supervision to efficiently take over its supervisory responsibilities and to ensure that there is no disruption in the monitoring and mitigation of money laundering and terrorist financing risks.

To ensure efficiency and consistency of supervision, the authority assuming supervision may decide to take over pending supervisory procedures or investigations when there is a transfer of supervisory tasks and powers between financial supervisors and the Authority. The authority assuming supervision should take into account its capacity and resources before deciding to take over a pending supervisory procedure or investigation.

In the case of groups, consistent with the identification of the entire group as a selected obliged entity, the arrangements outlined in Articles 10, 11 and 12 should apply to the Authority and to each relevant financial supervisor in the Member States where the selected obliged entity operates, on a bilateral basis.

Effective transfer of supervisory competence requires comprehensive and timely communication between the Authority and financial supervisors. Prompt exchange of information on pending supervisory procedures and investigations and their status ensures transparency and should enable the authority assuming supervision to make informed decisions, thereby safeguarding continuity and legal certainty during the transition.

Pending supervisory procedures and investigations may include any ongoing actions regarding potential non-compliance with AML/CFT obligations or any supervisory activity which may be directed towards preparing the issuance of a supervisory decision, including the imposition of administrative measures, pecuniary sanctions and periodic penalty payments, addressed to one or more obliged entities or individuals. To ensure effectiveness of supervisory actions, and considering that supervisory procedures or investigations remain pending from their formal initiation until a final decision is reached, it is important to ensure close and continuous coordination during the change period.

The Authority may take steps to enter into existing cooperation arrangements between financial supervisors and other authorities that cover at least in part supervisory tasks transferred to the Authority, or establish new cooperation arrangements with third parties for such tasks. Financial supervisors may continue to apply existing cooperation arrangements to the extent they refer to the tasks not transferred to the Authority.

To promote impartiality and foster supervisory convergence, the JST Coordinator should be subject to a rotation principle. Such rotation shall not undermine the effectiveness or continuity of supervision. In duly justified cases, the rotation period may be adjusted. Any such adjustment should be appropriately documented.

Effective supervision of selected obliged entities requires timely information sharing within joint supervisory teams, as well as equal access to participation in meetings, discussions and other collaborative platforms relating to the supervisory tasks assigned.

This Regulation is based on the draft implementing technical standards submitted to the Commission by the Authority.

The Authority has conducted open public consultations on the draft implementing technical standards on which this Regulation is based and analysed the potential related costs and benefits,