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1. Credit institutions and financial institutions, and groups of credit institutions and financial institutions, whose residual risk profile has been classified as high pursuant to Article 12 shall qualify as selected obliged entities.

2. However, where more than 40 entities are identified pursuant to paragraph 1, the Authority may, in consultation with the supervisory authorities, agree on limiting the selection to a specific different number of entities or groups that is greater than 40. In deciding on a specific different number of selected obliged entities as referred to in the first subparagraph, the Authority shall take into account its own resources in terms of its capacity to allocate or additionally hire the necessary number of supervisory and support staff and shall ensure that the required increase in the financial and human resources is feasible. Pursuant to the decision on the maximum number, the selected obliged entities shall be those obliged entities qualifying under paragraph 1 which are operating in the highest number of Member States whether through establishments or under the freedom to provide services. Where the application of the criterion referred to in the third subparagraph yields more than the set maximum number of selected obliged entities, the Authority shall select, from the obliged entities that would be selected in accordance with that subparagraph and that operate in the smallest number of Member States, those which have the highest ratio of the volume of transactions with third countries to the total volume of transactions measured over the last financial year.

3. Where in a Member State no credit institution, financial institution or group of credit institutions or financial institutions which is established, authorised or registered, or has a subsidiary there and whose risk profile is classified as high, qualifies as a selected obliged entity pursuant to paragraphs 1 and 2 of this Article, the Authority shall carry out an additional selection process in that Member State, on the basis of the methodology referred to in Article 12(7), point (b). Following the additional selection process, the credit institution, financial institution or group of credit institutions or financial institutions, established or registered in that Member State whose risk profile is classified as high, shall qualify as a selected obliged entity. Where several credit institutions or financial institutions, or groups of credit institutions or financial institutions, in the Member State in question have a risk profile that is classified as high, the entity operating in the highest number of Member States whether through establishments or under the freedom to provide services shall qualify as the selected obliged entity. If several credit institutions or financial institutions, or groups of credit institutions or financial institutions, operate in the same number of Member States, the entity with the highest ratio of transaction volume with third countries to total transaction volume measured over the last financial year shall qualify as a selected obliged entity.

4. The Authority shall commence the first selection process by 1 July 2027 and shall conclude the selection within six months of the date of commencement. Subsequently, the selection process shall be carried out every three years after the date of commencement of the first selection, and shall be concluded within six months for each selection process. The list of the selected obliged entities shall be published by the Authority without undue delay upon completion of the selection process. The Authority shall commence direct supervision of the selected obliged entities six months after publication of the list.

5. Prior to the publication of the list of the selected obliged entities, the Authority shall inform the relevant non-AML/CFT authorities of the outcomes of the process of assessment and classification of inherent and residual risk of the obliged entities subject to assessment.

6. A selected obliged entity shall remain subject to direct supervision by the Authority until the Authority commences the direct supervision of selected obliged entities based on a list established for the subsequent selection period which no longer includes that obliged entity.