Incoming EEA restrictions on non-EEA banks – one month to go

Why action is needed now 

From January 11, 2027, non-EEA banks will be prohibited from providing core banking services in the EEA unless they establish an authorized branch in each relevant member state, or an exemption applies.  

See our note on the new licensing requirements under Article 21c of the EU’s sixth capital requirements Directive (Directive 2024/1619, CRD VI) for further discussion of the scope of the restriction, the exemptions and implications.  

The Directive provides for rights acquired under contracts entered into before July 11, 2026, to be ‘grandfathered’, meaning that non-EEA banks will be able to continue to perform such contracts without breaching the new branch requirement.  

However, contracts entered into or amended on or after July 11, 2026, could render a non-EEA bank in breach of the new restrictions and unable to continue to perform that contract from January 11, 2027. Non-EEA banks therefore need to ensure that they comply with the requirements of the new regime from July 11, 2026. 

What Non-EEA banks need to do in advance of July 11, 2026

Non-EEA banking groups need to ensure that they understand the scope of the restrictions, impacted business lines and banking relationships, and have appropriate systems, policies and procedures in place ahead of the grandfathering date.  

In particular, they need to: 

1. Legal diligence 

Understand the national transposition of CRD VI in the various EEA jurisdictions in which they provide banking services to identify any divergences in scope, application of the exemptions or availability of grandfathering. In some Member States, the Article 21c requirements are already applicable.

2. Scoping

Identify:

• the group entities which are within scope of the new regime 
• those business lines and products which involve delivery of core banking services 
• the client relationships to which the new rules apply. 

3. Policies

Put appropriate policies in place to restrict marketing of core banking services into the EEA from 11 July, 2026.

4. Client communications 

Communicate with clients about what is changing and how this will impact their ability to provide services from July 11, 2026. 

5. Training 

Train group entity staff on the incoming restrictions and policies and procedures to ensure understanding and compliance. 

6. Record-keeping  

Put systems and procedures in place to record and evidence where banking business is provided cross-border into the EEA on the basis of reverse solicitation. 

7. Identifying and monitoring grandfathered contracts

Put systems and procedures in place to monitor grandfathered contracts in order to deal with lifecycle events which could attract the new branch requirement. 

A&O Shearman has been helping clients with each of the above and are well placed to assist. Please do reach out to your usual contact or any of the contacts at the end of this note if you wish to discuss the way forward to implementation.