CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

FCA 2013/xx
set out but are outside the scope of its core activities.
(3) In respect of the ‘unduly burdensome’ condition, the FCA considers
that an adequate, but not perfect, proxy for the likely level of expertise
available to a firm is whether its group has a trading book.
Accordingly, if a firm’s group does not have a trading book, the FCA
is likely to accept the argument that it would be unduly burdensome to
implement a rating system.
Permanent partial use: non-significant business units and immaterial exposure
classes and types
4.3.16 G Where a firm wishes permanently to apply the Standardised Approach to
certain business units on the grounds that they are non-significant and/or
certain exposure classes or types of exposures on the grounds that they are
immaterial in terms of size and perceived risk profile the FCA expects to
permit a firm to make use of this exemption to the extent that:
(1) the risk-weighted exposure amount calculated under article 92(3)(a)
and (f) of the EU CRR (based on the Standardised Approach), so far as
it is attributable to the exposures to which the Standardised Approach
is permanently applied being no more than 15% of the risk-weighted
exposure amount calculated under article 92(3)(a) and (f) of the EU
CRR (based on whichever of the Standardised Approach and the IRB
Approach would apply to the exposures at the time when the
calculation is being made);
(2) if a firm is part of a group subject to consolidated supervision in the
EEA and for which the FCA is the consolidating supervisor, the
calculations in (1) are carried out with respect to the wider group;
(3) if a firm is part of a group subject to consolidated supervision in the
EEA and for which the FCA is not the consolidating supervisor the
calculation in (1) will not apply but the requirements of the
consolidating supervisor relating to materiality will need to be met for
the wider group;
(4) if the firm is part of a sub-group subject to consolidated supervision in
the EEA and part of a wider third country group subject to equivalent
supervision by a regulatory authority outside of the EEA, the
calculation in (1) will not apply but the requirements of that third
country regulator relating to materiality will need to be met for both
the sub-group and the wider group; and
(5) if the firm is part of a sub-group subject to consolidated supervision in
the EEA and is part of a wider third country group that is not subject
to equivalent supervision by a regulatory authority outside of the EEA,
then the calculation in (1) applies for the wider group if supervision
by analogy applies and for the sub-group if other alternative
supervisory techniques apply.
The questions of whether a third country group is subject to equivalent
supervision, whether it is subject to supervision by analogy or whether other
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