When does an informal ECB communication become a challengeable act? The General Court’s Order in Banco Santander v ECB (T-610/24)

EU RegCORE Client Alert | Banking Union

QuickTake

On 17 March 2026, the General Court of the European Union (the General Court) issued an order (the Order) in Banco Santander v European Central Bank (T‑610/24) rejecting the European Central Bank’s (ECB), acting in its supervisory role in the context of the Banking Union’s Single Supervisory Mechanism (SSM), plea of inadmissibility against an annulment action brought by Banco Santander S.A. (Santander).

An action for annulment under Article 263 of the Treaty on the Functioning of the European Union (TFEU) is the principal remedy by which applicants may seek judicial review of EU acts before the EU courts. The action concerns an email sent by the Joint Supervisory Team (JST)A JST is a team of supervisors from both the ECB-SSM and the relevant national competent authority (NCA), established for each significant credit institution to carry out day-to-day supervision under the SSM. The JST serves as the primary point of contact between the supervised institution and its supervisors.Show Footnote on 16 October 2024, communicating the ECB-SSM’s position on the prudential treatment of deferred tax assets (DTAs)DTAs are assets recognised on a bank’s balance sheet representing future tax deductions; they arise, inter alia, from temporary differences between accounting and tax treatment of certain items, or from unused tax losses that can be carried forward. Under the CRR, certain DTAs must be deducted from regulatory capital because their value depends on future profitability, which is uncertain in times of stress.Show Footnote booked by Santander’s Brazilian subsidiary under the Capital Requirements Regulation (Regulation (EU) No 575/2013, the CRR).Publications available here.Show Footnote

The ECB-SSM argued that the email was a “non‑binding, purely informational communication” adopted in the context of informal supervisory dialogue and therefore not a “challengeable act” within the meaning of Article 263 TFEU. For context, a challengeable act, in EU law, is an act that produces binding legal effects capable of affecting an applicant’s interests by bringing about a distinct change in its legal position—only such acts may be the subject of an annulment action. The General Court disagreed with the ECB-SSM, holding that the communication produced binding legal effects and affected Santander’s legal position. In substance, it expressed the ECB-SSM’s definitive position on the correct interpretation and application of CRR provisions to Santander’s DTAs and increased the enforcement risk in case of non‑compliance.

As explored in this Client Alert, the General Court’s current Order is procedurally limited (it only resolves the preliminary objection of inadmissibility) but has potential broader implications for the reviewability of supervisory communications—such as operational acts,“Operational acts” are supervisory measures—short of formal decisions—that the ECB-SSM uses to communicate observations, expectations or concerns to supervised institutions during ongoing supervision. They are designed to induce supervised entities to remedy non-compliance or risks of non-compliance with prudential requirements at an early stage.Show Footnote expectation letters or findings emails—when they concretely determine a regulated firm’s prudential obligations.

Factual background to the Order

Santander, as a significant credit institution (SI or SCI),A “significant credit institution” (SCI) is a credit institution that meets the criteria for direct ECB-SSM supervision under the SSM, including total assets exceeding EUR 30 billion, economic importance to the EU or a Member State, or significant cross-border activities. The SSM is the system of banking supervision comprising the ECB-SSM and the NCAs of participating EU Member States, established by the SSM Regulation (Regulation (EU) No 1024/2013). Under the SSM, the ECB-SSM directly supervises SCIs (broadly, the largest banks in the euro area), while less significant institutions remain under national supervision, subject to ECB-SSM oversight.Show Footnote is directly supervised by the ECB-SSM for Banking Union purposes. On a consolidated basis, it must comply with own funds requirements laid down in the CRR.

The dispute arises from the treatment of DTAs recorded by Santander’s Brazilian subsidiary. Under Brazilian law, these DTAs are described as not dependent on future profits and guaranteed by the central government, becoming a claim on the state in case of losses, insolvency or liquidation. Santander accordingly applied a 100% risk weight to these DTAs and did not deduct them from Common Equity Tier 1 (CET1)CET1 capital is the highest-quality component of a bank’s regulatory capital under the CRR, consisting principally of common shares and retained earnings. It is the primary measure against which capital adequacy is assessed under the Basel III framework as implemented in EU law.Show Footnote capital. Santander relied on Article 39(2) CRR, which allows certain pre‑23 November 2016 DTAs not dependent on future profits to receive 100% risk‑weighting instead of CET1 deduction.

In April 2024, during periodic capital meetings, the JST raised the issue of the correct prudential treatment of the Brazilian DTAs. On 9 April 2024, Santander sent an email to the ECB-SSM, with a detailed presentation and three external legal opinions, explaining why it considered that the DTAs should not be deducted from CET1 and were eligible for 100% risk‑weighting.

On 16 October 2024, the JST emailed the contested communication (the Contested Act) to Santander. In that email, the JST set out the ECB-SSM’s view that the Brazilian DTAs did not satisfy the conditions of Article 39(2) CRR and concluded that they must be deducted from CET1 under Article 36(1)(c), Article 38 and Article 48 CRR. The email also mentioned that European Banking Authority (EBA) staff, though by slightly different reasoning, had reached the same conclusion.

Santander brought an annulment action before the General Court, seeking annulment of the Contested Act. The ECB-SSM raised a plea of inadmissibility, arguing that the email was not a challengeable act within the meaning of Article 263 TFEU.

The case was heard by the Second Chamber of the General Court, composed of President N. Półtorak, Judge-Rapporteur G. Steinfatt and Judge I. Dimitrakopoulos, with V. Di Bucci serving as Registrar. The language of the case was Spanish. The ECB-SSM filed its plea of inadmissibility on 10 February 2025, and Santander submitted its observations on the plea on 13 March 2025. The General Court issued a procedural organisation measure on 28 July 2025, to which the parties responded on 5 and 8 September 2025, respectively.

The General Court decided to rule without opening the oral procedure, on the basis that it was sufficiently informed by the documents on file.

The ECB-SSM’s arguments

The ECB-SSM advanced four principal arguments in support of its plea:

1. First, the ECB-SSM argued that the Contested Act produced no binding legal effects. The ECB-SSM submitted that Santander’s capital obligations derive directly from Articles 36(1)(c), 38 and 39 CRR (Pillar 1 requirements).“Pillar 1” refers to the minimum capital requirements that apply automatically to all credit institutions by operation of law under the CRR, without the need for any supervisory decision. These include requirements for credit risk, market risk and operational risk.Show Footnote The Contested Act would merely be an interpretive, non‑binding opinion from ECB-SSM and EBA staff, imposing no measures and no deadlines and leaving Santander free to follow its own interpretation. The ECB-SSM stressed that opening a sanction procedure under Article 18 of the SSM Regulation does not depend on any prior binding interpretation or decision, as the CRR provisions are directly applicable.
2. Second, the ECB-SSM submitted that the Contested Act was not a decision adopted in the exercise of ECB-SSM powers. The ECB-SSM argued that the email was sent in the context of informal prudential dialogue, as described in the ECB-SSM’s Supervisory ManualThe ECB-SSM’s Supervisory Manual is an internal guidance document setting out the methodologies and processes for SSM supervision. It describes, inter alia, the supervisory tools available to JSTs in their ongoing supervision of significant credit institutions, including the use of “operational acts” and “informal prudential dialogue”.Show Footnote and not at the end of a formal supervisory procedure. According to the ECB-SSM, the communication was a purely informative message, couched in impersonal and descriptive language, not imposing any obligation or implementation deadline. It considered that the underlying CRR provisions do not envisage any authorisation, waiver or exemption that the ECB-SSM could grant in this area; the communication therefore could not be seen as closing a supervisory procedure.
3. Third, the ECB-SSM classified the email as an “operational act” within the meaning of the Supervisory Manual. As stated above “operational acts are supervisory measures—short of formal decisions—that the ECB-SSM uses to communicate observations, expectations or concerns to supervised institutions during ongoing supervision. Such acts, in the ECB-SSM’s view, do not have binding legal force. Any subsequent formal supervisory decision of similar content would not be merely confirmatory but would itself be the first challengeable act. The ECB-SSM also argued that Article 47 of the Charter of Fundamental Rights of the European Union (the Charter), which enshrines the right to an effective remedy, does not confer a right to obtain binding interpretations or preventive decisions on request, nor does it relieve professional market participants from their responsibility to comply with directly applicable law.
4. Fourth, the ECB-SSM argued that the CRR provisions governing DTA deduction (Articles 36(1)(c), 38 and 39) do not confer on the ECB-SSM any power to grant an approval, authorisation, derogation or exemption and that the Contested Act could not therefore be said to have terminated a supervisory procedure or constituted a challengeable act.
   Santander’s arguments

Santander’s arguments can be summarised in the four following points:

1. Santander argued that the Contested Act is an act producing binding legal effects and thus challengeable. It contended that the email amounted to a definitive decision adopted by the ECB-SSM under Article 16(2)(d) SSM Regulation, determining facts in line with Article 33 of the SSM Framework Regulation (Regulation (EU) No 468/2014, the SSM Framework Regulation) and notified by email as permitted by Article 35(1)(f) of that Regulation. The bank maintained that the Contested Act was the outcome of a specific administrative procedure initiated at its own request under Article 95 SSM Framework Regulation and prepared following consultations with ECB-SSM horizontal teams and exchanges with EBA services. The absence of formal intervention by ECB-SSM decision‑making bodies would not deprive the act of binding character.
2. According to Santander, the ECB-SSM’s interpretation of Article 39(2) CRR in the email went beyond merely restating the law and effectively imposed a specific prudential treatment of the Brazilian DTAs—a “Pillar 2” type measure with binding effects.Pillar 2 refers to supervisory measures that go beyond the minimum Pillar 1 requirements, allowing competent authorities to require institutions to hold additional capital or take other measures based on institution-specific risks identified through the Supervisory Review and Evaluation Process (SREP)Show Footnote Any later supervisory decision (e.g. in the SREP context) or sanction decision based on the same interpretation would be merely confirmatory and therefore not itself open to challenge. Non‑compliance with the Contested Act would be treated as intentional in any subsequent sanction procedure, exposing the bank to more severe penalties.
3. Santander relied on Article 47 of the Charter, arguing that an interpretation of the rules on admissibility that forces institutions to infringe EU law to obtain a challengeable act—and thereby incur intentional violations—would be hardly compatible with the right to effective judicial protection guaranteed thereunder.
4. Santander also pointed out that ECB-SSM representatives had orally indicated, after the Contested Act, that the position set out was definitive, flowed directly from applicable law and that the ECB-SSM could launch sanction proceedings if the required treatment of DTAs was not implemented. The ECB-SSM had followed up by emails in December 2024 to verify whether the treatment prescribed in the Contested Act had been applied, reinforcing the impression that compliance was expected.

The General Court’s reasoning

The General Court’s reasoning is grounded on the following considerations:

Substance-over-form approach

Relying on settled case‑law, including ABLV Bank v ECB and Picard v Commission, the General Court recalled that only acts producing binding legal effects capable of affecting the applicant’s interests by distinctly changing its legal position are challengeable under Article 263 TFEU. The nature of the act must be assessed having regard to its substance, taking into account its content, the context of its adoption and the powers of its author; the form of the act (including whether it takes the form of an email or bears a specific label such as “decision”) is in principle irrelevant.

The General Court stressed that modalities governing remedies must be interpreted, as far as possible, in a manner that ensures effective judicial protection and prevents Union bodies from escaping judicial control by the simple choice of form or by non‑compliance with formalities.

Significantly, the General Court held — citing Picard v Commission (C-366/21 P) — that the fact that an act is transmitted by email cannot of itself preclude its qualification as a challengeable act. The General Court stressed that if it were otherwise, EU institutions could evade judicial review merely by disregarding formal requirements. The General Court further recalled — citing Intrasoft International v Commission (T-403/12) — that it is irrelevant whether an act is designated as a “decision” or refers to available remedies. Invoking the constitutional principle that the EU is a “community of law” in which its institutions are subject to review of the conformity of their acts with the Treaties, the General Court held that the procedural rules governing judicial access must be interpreted so as to contribute to effective judicial protection.

Content of the Contested Act

The General Court observed that the email explicitly aimed to set out the ECB-SSM’s “view” on the correct prudential treatment of the Brazilian DTAs consolidated in Santander’s accounts and applied the CRR framework to the specific situation presented by Santander, concluding that the DTAs created by the Brazilian subsidiary, both before and after 23 November 2016, did not meet the conditions of Article 39(2) CRR and thus had to be deducted from CET1 under Article 36(1)(c) and Articles 38 and 48 CRR.

This conclusion was accompanied by reasoning summarising the relevant provisions and explaining their application to Santander’s situation. The General Court found that the Contested Act did not merely supply general information on the legal framework but indicated how those provisions had to be interpreted and applied in the applicant’s case.

Context of adoption

The General Court located the email in the wider exchange between the parties. Santander’s email of 9 April 2024 presented its analysis of the Brazilian DTAs and sought the ECB-SSM’s view on the legality of its treatment. The ECB-SSM treated this as a request under Article 95(1) SSM Framework Regulation, as evidenced by its addressing the reply to Santander’s representatives and stating that the email was sent “as requested”.

The General Court emphasised that the fact that the email was issued in the context of “informal prudential dialogue” pursuant to the Supervisory Manual did not prevent it from being a challengeable act. The Supervisory Manual neither excludes the possibility that during such dialogue the ECB-SSM may adopt acts with binding effects, nor can its internal classifications determine the meaning of “act” under Article 263 TFEU.

Even assuming the Contested Act was an “operational act” within the meaning of the Supervisory Manual, the General Court noted that such acts are listed among prudential supervisory measures designed to induce supervised entities, at an early stage, to remedy non‑compliance or risks of non‑compliance with prudential requirements. They thus may clarify a supervised entity’s obligations and produce binding legal effects.

Powers of the author

The General Court recalled that under Article 4(1)(d) SSM Regulation, the ECB-SSM is exclusively competent to ensure compliance by credit institutions with prudential requirements, including own funds requirements. For this purpose, the ECB-SSM exercises its powers under Articles 16 and 18 SSM Regulation. A JST, composed of ECB-SSM and NCA staff, is set up for each SCI pursuant to the SSM Framework Regulation and can adopt operational acts.

The Contested Act was sent by the JST responsible for Santander. It was undisputed that the JST was competent to adopt operational acts vis‑à‑vis Santander. Importantly, the email explicitly stated that it was intended to provide Santander with “the ECB-SSM’s view” and that it reflected the views of ECB-SSM horizontal teams consulted in its preparation.

The General Court therefore found that the Contested Act expressed the ECB-SSM’s institutional position, not merely that of ECB-SSM staff, regarding Santander’s prudential obligations. It had to be regarded as the ECB-SSM’s definitive position on the obligations with which Santander must comply, rather than as a preliminary, provisional, or purely informational opinion.

Effects on Santander’s legal position and enforcement risk

The General Court gave significant weight to the practical consequences of accepting the ECB-SSM’s position and considered the following:

Right to effective judicial protection

Having regard to the ECB-SSM’s own explanations in the proceedings, the General Court underlined that if Santander decided not to follow the interpretation in the Contested Act, the ECB-SSM could choose between (i) adopting a supervisory decision under Article 16 SSM Regulation or (ii) directly opening a sanction procedure under Article 18 SSM Regulation for breach of directly applicable CRR provisions. The ECB-SSM acknowledged that an administrative pecuniary sanction could in principle be imposed without any prior Article 16 decision requiring compliance with the interpretation contained in the Contested Act.

Consequently, to contest the ECB-SSM’s view in the absence of judicial review of the email, Santander would effectively have to disregard the Contested Act and expose itself to a sanction under Article 18 SSM Regulation. The General Court further noted that, under the ECB-SSM methodology for determining administrative pecuniary sanctions, the intentional or negligent nature of the infringement is taken into account. Case‑law confirms that the ECB-SSM may treat an infringement as intentional where an institution persists in its behaviour after being informed by its JST of the scope of its obligations.

The existence of the Contested Act is therefore capable of influencing the assessment of the gravity of any future infringement and the severity of sanctions, by reinforcing the case for characterising any non‑compliance as intentional.

Role of Article 47 of the Charter

While stating that Article 47 of the Charter does not alter the formal admissibility conditions of actions for annulment, the General Court held that this fundamental right must be considered in the interpretation and application of those conditions. In particular, it must be ensured that access to the court does not depend on obliging parties to infringe EU law and accept the risk of administrative proceedings and sanctions.

In the circumstances of this case, the General Court considered that treating the email as non‑challengeable would have such an effect, given the ECB-SSM’s acknowledgement that sanctions could be imposed without a prior supervisory decision and the increased likelihood that any violation would be characterised as intentional.

Conclusions of the General Court

The General Court concluded that the Contested Act produced binding legal effects and distinctly affected Santander’s legal position and therefore constitutes an act which may be the subject of an action for annulment under Article 263 TFEU. Accordingly, the ECB-SSM’s plea of inadmissibility was rejected. The Order reserves the issue of costs to the final decision on the merits.

Wider considerations for regulated firms

Although the scope of the Order is limited to admissibility, the ruling provides important guidance on when supervisory communications, even those labelled as “informal” or “operational”, may be directly challenged. The reasoning of the General Court in respect of the Order carries several important implications for financial services firms operating under the EU’s Banking Union supervision as well as explored below, possibly, in other domains.

1. Informal supervisory communications may now be challengeable. The most significant takeaway is that the General Court has confirmed a substance-over-form approach to determining whether a supervisory act is challengeable under Article 263 TFEU. The Contested Act in this case bore none of the hallmarks of a formal ECB-SSM decision — it was transmitted by ordinary email, was not adopted by the ECB-SSM’s decision-making bodies and contained no reference to available remedies. Nevertheless, the General Court held it constituted a challengeable act because it definitively determined Santander’s prudential obligations and brought about a distinct change in its legal position.
2. Substance over form. The General Court confirms that the decisive criteria are the content, context and effects of the communication, not its form, label, or placement within an internal manual. Emails and other informal channels can carry binding effects.
3. Definitive position and enforcement consequences. Where a communication applies EU prudential rules to a specific institution’s situation, reaches a concrete conclusion on its obligations and is accompanied by monitoring or the threat of enforcement, it is likely to be seen as changing the institution’s legal position.
4. Operational acts and prudential dialogue. Even within “informal” dialogue, JST‑issued operational acts can be challengeable if they clarify and concretise obligations under CRR or other prudential rules.
5. Effective judicial protection. The General Court is mindful of scenarios where institutions would otherwise need to deliberately disobey a supervisory communication to obtain a challengeable act. Such outcomes are difficult to reconcile with Article 47 of the Charter and will influence the interpretation of admissibility conditions.

For financial services firms, this means that a wide range of supervisory communications — including expectations letters, findings communications, operational acts and other instruments issued during so-called “informal prudential dialogue” — may be susceptible to judicial review where they go beyond general guidance and apply a reasoned conclusion to a firm’s specific circumstances. The label attached by the supervisory authority, or the procedural context in which the communication arises, is not determinative.

Enhanced scope for early judicial challenge

Firms subject to direct ECB-SSM supervision now have a stronger basis on which to challenge supervisory positions at the point they are communicated, rather than being compelled to wait for a formal downstream decision. The General Court placed considerable weight on the practical consequences of the ECB-SSM’s argument that the email was non-binding: if a firm could only obtain a challengeable act by deliberately maintaining a position contrary to the supervisor’s stated view, any resulting infringement would be treated as intentional, attracting heavier sanctions under the ECB-SSM’s own penalty methodology. The General Court cited VQ v ECB (T-203/18) in support of the principle that the ECB-SSM is entitled to treat an infringement as intentional where the supervised institution has maintained its conduct after being informed by its JST of the scope of its obligations. Requiring an institution to break the law so as to access judicial review was held to be incompatible with Article 47 of the Charter (the right to effective judicial protection).

This reasoning is particularly relevant for firms that receive supervisory communications directing them to alter their prudential treatment of specific exposures, capital items, or risk weightings. Such firms should no longer assume that the only route to judicial review is non-compliance followed by a formal sanction or supervisory decision. The Order provides a third path: direct challenge of the supervisory communication itself where it definitively determines the firm’s obligations.

Broader relevance beyond the SSM

The Order’s reasoning is unlikely to be confined to ECB-SSM supervision under the SSM. The approach may extend to the full spectrum of supervisory measures deployed by the European Supervisory Authorities[The European Supervisory Authorities (ESAs) comprise the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). They are EU agencies responsible for contributing to the consistent application of EU financial services legislation and for fostering supervisory convergence across Member States.] and, prospectively, the Anti-Money Laundering Authority (AMLA).The Anti-Money Laundering Authority (AMLA) is the EU’s new anti-money laundering authority, established under Regulation (EU) 2024/1620. AMLA will become the EU’s direct supervisor for the highest-risk obliged entities (initially, certain credit and financial institutions) under the new EU AML framework, with direct supervisory powers analogous to those exercised by the ECB under the SSM.Show Footnote Any instrument that definitively determines an addressee’s obligations and exposes it to aggravated enforcement risk in the event of non-compliance may be treated as a challengeable act, regardless of its formal designation.

Read alongside ABLV Bank v ECB, the Order illustrates that the inquiry into “challengeability” is inherently contextual. In ABLV, the ECB-SSM’s failing-or-likely-to-fail assessment was held to be non-challengeable because it constituted a preparatory measure within a multi-stage resolution procedure, its legal effects absorbed into the downstream decision of the Single Resolution Board (SRB).The Single Resolution Board (SRB) is the EU agency responsible for resolution planning and the resolution of failing significant credit institutions in participating Member States under the Single Resolution Mechanism (SRM). It works alongside the ECB-SSM in the Banking Union framework.Show Footnote In Santander, by contrast, even though a formal downstream act could theoretically have existed, the General Court found that the Contested Act already expressed the ECB-SSM’s definitive position on the applicant’s prudential obligations. This distinction highlights that the test is not whether a formal act could follow, but whether the supervisory communication already definitively determines the addressee’s obligations.

Practical points for firms

Firms should bear in mind several practical points arising from this Order beyond assessing the wider implications highlighted above:

• Record-keeping and procedural awareness. Communications received during supervisory dialogue — even those framed as informal or non-binding — should be carefully assessed for their substantive content. Where they express a definitive supervisory position on the firm’s obligations, they may constitute challengeable acts and the two-month limitation period for bringing an annulment action under Article 263 TFEU could begin to run from receipt. The General Court placed weight on the ECB-SSM’s own conduct — addressing the response to “Dear Santander representatives,” stating it was sent “as requested,” and subsequently following up to verify compliance — and firms should treat such indicia as potentially critical evidence in establishing that a communication amounts to a definitive position.
• Capital and prudential treatment disputes. The case arose from a disagreement over the deduction of DTAs from CET1 capital. Firms engaged in similar disputes over the prudential classification of balance sheet items should note that the ECB-SSM’s communicated view, even absent a formal decision, may now be treated as binding and reviewable. The General Court was clear that the Supervisory Manual’s internal classifications of instruments as “operational acts” or products of “informal dialogue” are not determinative for Article 263 purposes.
• Impact on pending cases. The Order may have implications for other pending cases before the General Court or the Court of Justice involving similar questions about the reviewability of supervisory communications. Institutions that have received comparable informal communications from the ECB-SSM—whether in the form of operational acts, expectation letters or findings emails—may now have stronger grounds to seek judicial review of those communications directly, rather than awaiting formal supervisory decisions. Equally, the reasoning may inform the approach of applicants in cases pending before the SSM’s Administrative Board of Review (ABoR) which is integral as the ECB-SSM’s internal review body, where questions arise as to whether a particular supervisory measure constitutes a reviewable act.
• Implications for the ABoR’s role. The Order may also affect the role of the ABoR in the SSM’s supervisory architecture. The ABoR is empowered under Article 24 of the SSM Regulation to conduct internal administrative reviews of ECB-SSM decisions at the request of affected parties. If a broader range of supervisory communications is now recognised as constituting challengeable acts, there may be an increase in requests for ABoR review as a precursor to—or alternative to—judicial proceedings before the General Court. Firms may wish to consider whether informal communications they have received may fall within the ABoR’s review jurisdiction, particularly where they express definitive supervisory positions on prudential obligations.
• Potential revisions to ECB-SSM guidance. It remains to be seen whether the ECB-SSM will revise its Supervisory Manual or internal guidance documents in response to this Order. The General Court was clear that the Supervisory Manual’s classification of certain communications as “operational acts” or products of “informal prudential dialogue” does not determine their status under Article 263 TFEU. The ECB-SSM may therefore consider updating its guidance to clarify the legal status and potential reviewability of different categories of supervisory communication, or alternatively, it may adjust its supervisory practices to ensure that communications intended to be non-binding are framed in a manner less likely to be characterised as producing binding legal effects.
• Strategic response to supervisory positions. Ultimately, as a result of the Order, firms are no longer placed in the binary position of either complying with a supervisory view they consider incorrect or deliberately breaching it to provoke a challengeable act. The Order provides a third path: direct challenge of the supervisory communication itself, provided it definitively determines the firm’s obligations under EU law. This is a significant safeguard, confirming that where a supervisory authority has expressed what amounts to a definitive position on a firm’s obligations, the firm need not wait for — and indeed should not be required to provoke — a formal adverse decision so as to access judicial review.

For SSM supervised firms, the Order indicates that carefully reasoned supervisory communications which state that they provide “the ECB-SSM’s view”, apply the law to the addressee’s specific situation and are used as a reference point in subsequent monitoring or as a basis for asserting that non‑compliance will be treated as intentional, may be open to direct judicial challenge, even where they are not formal decisions adopted by the ECB-SSM’s governing bodies and even if they are framed as part of ongoing prudential dialogue.

Outlook

The Order is, at first blush, a procedural ruling on admissibility. In substance, however, it addresses a foundational question concerning the conditions under which supervisory acts acquire sufficient binding force to ground an annulment action under Article 263 TFEU. By applying a rigorous substance-over-form analysis and by giving real weight to the practical consequences of denying judicial access, the General Court has strengthened the rights of supervised entities to challenge supervisory positions that definitively determine their prudential obligations—regardless of the form, channel or internal classification adopted by the supervisor.

The Order resolves only the preliminary question of admissibility. The case will now proceed to the merits stage, at which the General Court will examine whether the Contested Act should be annulled on substantive grounds. The parties will exchange written pleadings on the substance, and an oral hearing may be scheduled. A judgment on the merits is not expected before late 2026 or 2027.

Under Article 56 of the Statute of the Court of Justice of the European Union, appeals to the Court of Justice may be brought against final decisions of the General Court and against decisions disposing of the substantive issues in part only or disposing of a procedural issue concerning a plea of lack of competence or inadmissibility. The ECB-SSM may therefore seek to appeal the Order to the Court of Justice within two months of its notification. Regulated firms should monitor the case for any such appeal, which could result in further clarification of the criteria for “challengeability” of supervisory communications.

This development will be relevant not only under the SSM framework but potentially also for other EU financial supervisors’ communications (e.g. European Supervisory Authorities and future AML supervision structures), insofar as such instruments concretely determine an institution’s obligations and materially affect its enforcement risk. Ultimately, this is a significant development in EU supervisory law and a precedent that regulated firms should monitor closely as further case‑law develops.

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