Art. 2(1)(42) AMLR: who is the parent undertaking

Point 42 of Article 2(1) of Regulation (EU) 2024/1624 defines “parent undertaking”. Article 2(1) is a list of definitions, so the numbering matters when you cite it. Point (41) is “group” and point (43) is “cash”, which confirms you have the right neighbours.

Two branches

(a) The group is headquartered in the Union. The parent undertaking is an obliged entity that is a parent under Directive 2013/34/EU, is not itself a subsidiary of another undertaking in the Union, and has at least one subsidiary that is an obliged entity.

(b) The group is headquartered outside the Union. Where at least two subsidiaries are obliged entities established in the Union, the parent undertaking is a Union-established undertaking in the group that is an obliged entity and is not a subsidiary of another Union-established obliged entity. It must also have sufficient prominence and understanding of the group’s regulated operations, and be responsible for implementing the group-wide requirements in Chapter II, Section 2.

Why it matters

Article 16 puts the group-wide duties on the parent undertaking: a group-wide risk assessment, group policies and controls, a group compliance manager and information sharing between entities. If you cannot say which entity is the parent under point (42), you cannot say who owns those duties.

An example

A US payments group owns an e-money institution in Malta and a payment institution in Ireland. Neither is a subsidiary of the other. Under branch (b), the group needs to settle which of the two EU entities holds the parent role. The Regulation’s test is “sufficient prominence and understanding”, which is judgement rather than a formula, so write the reasoning down.

Standards in progress

Article 16(4) tells AMLA to draft standards on group-wide requirements, including criteria for identifying the parent undertaking in the branch (b) cases and for structures with common ownership, management or compliance control. AMLA announced its final draft on 1 October 2026; it has gone to the Commission and is not yet adopted. We have not read the draft’s treatment of the parent undertaking test, so check the report itself. Track them via the technical standards tracker.

Our view

Groups with an old holding structure and a patchwork of licences are the ones to worry about. Few groups have ever had to name a parent in this sense. In 2027 they will.

What this means for you

If you run, or advise, a cross-border group, work out your point (42) answer now. Use the enquiry form to schedule a no-obligation call about it.

General information, not legal advice.