Source: AMLA final report draft
- Anti-money laundering
AMLAR supplemental acts
- RTS on risk assessment to select institutions for direct supervision
Article 1 Materiality thresholds for operations under the freedom to provide services
This is a draft act
This text has been parsed from the AMLA final report draft as published on 16 December 2025. While we run a suite of validations, the automated parsing can result in errors. Also, before it is finally adopted by the Commission, its wording, numbering and references may change, and entire articles might be removed or added.
Summary What does Article 1 of the RTS on risk assessment to select institutions for direct supervision say?
This article establishes the quantitative thresholds that determine when a credit or financial institution's cross-border activities — carried out under the freedom to provide services — are considered "material" for the purposes of Article 12(1) of Regulation (EU) 2024/1620.
In essence, it draws a clear line between incidental and significant cross-border presence, using two concrete metrics: customer numbers and transaction volumes.
The article also addresses how these thresholds are calculated, notably requiring that all delivery channels be counted together and that group entities operating in the same Member State pool their figures.
Important points:
- Your cross-border activities in another Member State are considered material if you exceed 20,000 resident customers or EUR 50,000,000 in annual transaction volume in that Member State.
- Count all activities toward these thresholds regardless of whether they are conducted directly, through branches, agents, or distributors.
- Where multiple entities within the same group operate under the freedom to provide services in the same Member State, their activities must be aggregated when applying the thresholds.
Springlex's summary of the article, a reading aid, not a substitute for the legal text.
The minimum activities carried out by a credit institution or a financial institution under the freedom to provide services in a Member State other than the Member State where it is established shall be considered material for the purposes of meeting the conditions of Article 12(1) of Regulation (EU) 2024/1620, where:
the number of its customers that are resident in that Member State exceeded 20 000 as of 31 December in the previous year; or
the total annual amount of incoming and outgoing transactions generated by customers referred to in point (a) in the previous year exceeds EUR 50 000 000, or the equivalent in national currency.
For the purposes of the first subparagraph, all activities carried out under the freedom to provide services in a given Member State by a credit institution or a financial institution shall be taken into account, irrespective of whether those activities are carried out directly, through its branches, its agents, or its distributors.
Where several credit institutions or financial institutions within the same group carry out activities under the freedom to provide services in the same Member State, their activities in that Member State shall be aggregated for determining the minimum activities pursuant to points (a) and (b) of the first subparagraph.
Whether the activity of a credit institution or a financial institution or a group thereof meets any of the materiality thresholds referred to in paragraph 1, points (a) and (b), shall be determined based on the data points listed in Section C of Annex I.
Springlex and this text is meant purely as a documentation tool and has no legal effect. No liability is assumed for its content. The authentic version of this act is the one published in the Official Journal of the European Union.
Definition
crypto-asset services
Definition
financial mixed activity holding company
Definition
crypto-asset service provider
Definition
credit institution
- a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013;
- a branch of a credit institution, as defined in Article 4(1), point (17), of Regulation (EU) No 575/2013, when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
parent undertaking
- for groups whose head office is located in the Union, an obliged entity that is a parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU that is not itself a subsidiary of another undertaking in the Union, provided that at least one subsidiary undertaking is an obliged entity;
- for groups whose head office is located outside of the Union, where at least two subsidiary undertakings are obliged entities established in the Union, an undertaking within that group established in the Union that:
- is an obliged entity;
- is an undertaking that is not a subsidiary of another undertaking that is an obliged entity established in the Union;
- has a sufficient prominence within the group and a sufficient understanding of the operations of the group that are subject to the requirements of this Regulation; and
- is given the responsibility of implementing group-wide requirements under Chapter II, Section 2 of this Regulation;
Definition
crypto-asset
Definition
property
Definition
group
Definition
financial institution
- an undertaking other than a credit institution or an investment firm, which carries out one or more of the activities listed in points (2) to (12), (14) and (15) of Annex I to Directive 2013/36/EU of the European Parliament and of the Council(32), including the activities of currency exchange offices (bureaux de change), but excluding the activities referred to in point (8) of Annex I to Directive (EU) 2015/2366, or an undertaking the principal activity of which is to acquire holdings, including a financial holding company, a mixed financial holding company and a financial mixed activity holding company;
- an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council(33), insofar as it carries out life or other investment-related assurance activities covered by that Directive, including insurance holding companies and mixed-activity insurance holding companies as defined, respectively, in Article 212(1), points (f) and (g), of Directive 2009/138/EC;
- an insurance intermediary as defined in Article 2(1), point (3), of Directive (EU) 2016/97 where it acts with respect to life insurance and other investment-related insurance services, with the exception of an insurance intermediary that does not collect premiums or amounts intended for the customer and which acts under the responsibility of one or more insurance undertakings or intermediaries for the products which concern them respectively;
- an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU of the European Parliament and of the Council(34);
- a collective investment undertaking, in particular:
- an undertaking for collective investment in transferable securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC and its management company as defined in Article 2(1), point (b), of that Directive or an investment company authorised in accordance with that Directive and which has not designated a management company, that makes available for purchase units of UCITS in the Union;
- an alternative investment fund as defined in Article 4(1), point (a), of Directive 2011/61/EU and its alternative investment fund manager as defined in Article 4(1), point (b), of that Directive that fall within the scope set out in Article 2 of that Directive;
- a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council(35);
- a creditor as defined in Article 4, point (2), of Directive 2014/17/EU of the European Parliament and of the Council(36) and in Article 3, point (b), of Directive 2008/48/EC of the European Parliament and of the Council(37);
- a credit intermediary as defined in Article 4, point (5), of Directive 2014/17/EU and in Article 3, point (f), of Directive 2008/48/EC, when holding the funds as defined in Article 4, point (25), of Directive (EU) 2015/2366 in connection with the credit agreement, with the exception of the credit intermediary carrying out activities under the responsibility of one or more creditors or credit intermediaries;
- a crypto-asset service provider;
- a branch of a financial institution referred to in points (a) to (i), when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
third country
Definition
funds