1.The Member States shall provide that the activities listed in the Annex may be carried on within their territories, in accordance with Articles 19 to 21, either by the establishment of a branch or by way of the provision of services, by any credit institution authorized and supervised by the competent authorities of another Member State, in accordance with this Directive, provided that such activities are covered by the authorization.
2.The Member States shall also provide that the activities listed in the Annex may be carried on within their territories, in accordance with Articles 19 to 21, either by the
establishment of a branch or by way of the provision of services, by any financial institution from another Member State, whether a subsidiary of a credit institution or the jointly-owned subsidiary of two or more credit institutions, the memorandum and articles of association of which permit the carrying on of those activities and which fulfils each of the following conditions:
- the parent undertaking or undertakings must be authorized as credit institutions in the Member State by the law of which the subsidiary is governed,
- the activities in question must actually be carried on within the territory of the same Member State,
- the parent undertaking or undertakings must hold 90 % or more of the voting rights attaching to shares in the capital of the subsidiary,
- the parent undertaking or undertakings must satisfy the competent authorities regarding the prudent management of the subsidiary and must have declared, with the consent of the relevant home Member State competent authorities, that they jointly and severally guarantee the commitments entered into by the subsidiary,
- the subsidiary must be effectively included, for the activities in question in particular, in the consolidated supervision of the parent undertaking, or of each of the parent undertakings, in accordance with Directive 83/350/EEC, in particular for the calculation of the solvency ratio, for the control of large exposures and for purposes of the limitation of holdings provided for in Article 12 of this Directive.
Compliance with these conditions must be verified by the competent authorities of the home Member State and the latter must supply the subsidiary with a certificate of compliance which must form part of the notification referred to in Articles 19 and 20.
The competent authorities of the home Member State shall esnure the supervision of the subsidiary in accordance with Articles 10 (1), 11, 13, 14 (1), 15 and 17 of this Directive and Articles 7 (1) and 12 of Directive 77/780/EEC.
The provisions mentioned in this paragraph shall be applicable to subsidiaries, subject to the necessary modifications. In particular, the words ́credit institution' should be read as ́financial institution fulfilling the conditions laid down in Article 18 (2)' and the word ́authorization' as ́memorandum and articles of association'.
The second subparagraph of Article 19 (3) shall read:
́The home Member State competent authorities shall also communicate the amount of own funds of the subsidiary financial institution and the consolidated solvency ratio of the credit institution which is its parent undertaking.'
If a financial institution eligible under this paragraph should cease to fulfil any of the conditions imposed, the home
Member State shall notify the competent authorities of the host Member State and the activities carried on by that institution in the host Member State shall become subject to the legislation of the host Member State.