8.12.2011 Official Journal of the European Union L 326113 DIRECTIVES DIRECTIVE 2011/89/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 November 2011 amending Directives 98/78/EC, 2002/87/EC, 2006/48/EC and 2009/138/EC as regards the supplementary supervision of financial entities in a financial conglomerate (Text with EEA relevance) THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 53(1) thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Central Bank (!), Acting in accordance with the ordinary legislative procedure (2), Whereas: (1)  Directive 2002/87EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate (%) provides competent authorities in the financial sector with supplementary powers and tools for the supervision of groups composed of many regulated entities, which are active in different sectors of the financial markets. Such groups (financial conglomerates), are exposed to risks (group risks) which include: the risks of contagion, where risks spread from one end of the group to another; risk concentration, where the same type of risk materialises in various parts of the group at the same time; the complexity of managing many different legal entities; potential conflicts of interest; and the challenge of allocating regulatory capital to all the regulated entities which are part of the financial conglomerate, thereby avoiding the multiple use of capital. Financial conglomerates should therefore be subject to supervision supplementary to supervision on () OJ C 62, 26.2.2011, p. 1. (%) Position of the European Parliament of 5 July 2011 (not yet published in the Official Journal) and decision of the Council of 8 November 2011. () OJ L 35, 11.2.2003, p. 1. a stand alone, consolidated or group basis, without dupli- cating or affecting the group and regardless of the legal structure of the group. (2) It is appropriate to ensure consistency between the aims of Directive 2002/87[EC, on the one hand, and Council Directives  73/239/EEC (¥} and 92[49[EEC () and Directives 98/78/EC (), 2002/83/EC (), 2004/39[EC (), 2005/68/EC (), 2006/48JEC (19,  2006/49/EC (11), 2009/65/EC (1), 2009/138/EC (%) and 2011/61/EU (%) of the European Parliament and of the Council, on the other, in order to enable appropriate supplementary supervision of insurance and banking groups, including where they are part of a mixed financial holding structure. (*) First Council Directive 73/239/EEC of 24 July 1973 on the coor- dination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (O] L 228, 16.8.1973, p. 3). (>} Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance (third non-life insurance Directive) (O] L 228, 11.8.1992, p. 1). (°) Directive 98/78/EC of the European Parliament and of the Council of 27 October 1998 on the supplementary supervision of insurance and reinsurance undertakings in an insurance or reinsurance group (O] L 330, 5.12.1998, p. 1). (7) Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (O] L 345, 19.12.2002, p. 1). (%) Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (O] L 145, 30.4.2004. p. 1). (°) Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance (O] L 323, 9.12.2005, p. 1). (%) Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (O] L 177, 30.6.2006, p. 1). (') Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (O] L 177, 30.6.2006, p. 201). (*?) Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (O] L 302, 17.11.2009, p. 32). (*) Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (O] L 335, 17.12.2009, p. 1). (**) Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (O] L 174, 1.7.2011, p. 1).