Home or host — who you report to when passporting

Passporting harmonises authorisation. It does not harmonise reporting, and the split between home and host is not a single line. Prudential reporting generally follows the home supervisor. Statistical reporting follows residence. Several national obligations follow the customer’s residence and reach a firm with no establishment in the market at all. A firm that assumes one passport means one reporting relationship will be wrong in every market it enters.

1. Three different attachment rules

2. Statistical reporting follows residence

The European statistical framework is explicit: reporting agents report to the national central bank of the member state in which the reporting agent is resident, either directly or through the relevant national competent authority under local cooperation arrangements. National central banks then define the arrangements in accordance with national characteristics.

Two practical consequences. A branch that is resident in a host state can be a reporting agent there in its own right. And because each national central bank designs its own arrangements, the same European content arrives in a different file, through a different channel, on a different deadline in each market — which is why a group operating in five markets has one data model and five submissions.

3. Branch versus services changes the answer

The two passporting modes produce genuinely different reporting footprints:

• Freedom of establishment (a branch). Creates a presence in the host state, which typically engages host statistical reporting, host conduct reporting and host AML supervision — alongside whatever remains with the home supervisor.
• Freedom of services. Creates no establishment, which removes some host obligations — but not the ones framed around the customer rather than the firm.

That means the reporting question is a genuine input to the branch-versus-services decision, not a consequence of it. A firm choosing freedom of services to avoid host reporting will still find the customer-residence obligations waiting for it, and will have given up the local presence that makes them easier to service.

4. Scoping it properly

The method that works is to test each obligation against four questions rather than to reason from the licence:

• Does it attach to the authorised entity? Then it is probably home-state.
• Does it attach to residence of the reporting agent? Then it follows where the entity or branch is resident.
• Does it attach to where the activity is carried on? Then the host state has a claim.
• Does it attach to the customer? Then establishment is irrelevant.

Only the fourth question is commonly skipped, and it is the one that produces unpleasant surprises — because nothing in the passporting notification process tells you about it.

5. A worked case

Facts: an EMI authorised in one member state passports into three others — a branch in one, freedom of services in two — and serves consumers in all three.

What the analysis produces: prudential reporting consolidates at home. The branch is a resident reporting agent in its market and reports statistically there. The two freedom-of-services markets generate no establishment-based returns — but each is tested separately against its customer-residence obligations, and at least one of them has a substantial one.

What the practitioner does: builds a matrix of obligation against market, with the attachment rule as an explicit column, and treats the passporting notification as the start of the scoping exercise rather than the end of it. The single highest-value control is an annual re-test of the customer-residence question, because that is the one that changes when the business grows into a market without any regulatory event marking the change.

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Related: Branch vs freedom of services · PSD2 passporting · Account registers compared