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

FCA 2013/xx
the financial situation of the undertaking concerned would be
inappropriate or misleading as far as the objectives of the supervision
of credit institutions are concerned.
8.1.13 G If several undertakings meet the criteria in IFPRU 8.1.12G(2) above, the FCA
will not agree to exclude them all from the consolidation where collectively
they are not of negligible interest with respect to the specified objectives.
8.1.14 G The FCA may require a firm to provide information about the undertakings
excluded from consolidation.
Core UK groups
8.1.15 G Under article 113(6) of the EU CRR (Intra-group credit risk exemption),
institutions may apply to the FCA for approval to incorporate undertakings
within a sub-consolidated group in order to achieve a 0% risk-weighting for
any exposures between these entities and to fully exempt such exposures
from the large exposures limit stipulated in article 395(1) of the EU CRR
(Limits to large exposures).
8.1.16 G The FCA will assess core UK group applications against article 113(6) on a
case-by-case basis. The FCA will only approve this treatment for core UK
group undertakings where the conditions stipulated in article 113(6) are met.
A firm should note that the FCA will still make a wider judgement whether it
is appropriate to grant this treatment even where the conditions in article
113(6) are met.
8.1.17 G This permission in the EU CRR is subject to meeting the specific conditions
in article 113(6)(a) to (e):
(a)
(b)
(c)
(d)
(e)
the counterparty is an institution, a financial holding company or a
mixed financial holding company, financial institution, asset
management company or ancillary services undertaking subject to
appropriate prudential requirements;
the counterparty is included in the same consolidation as the
institution on a full basis;
the counterparty is subject to the same risk evaluation, measurement
and control procedures as the institution;
the counterparty is established in the same EEA State as the
institution;
there is no current or foreseen material practical or legal impediment
to the prompt transfer of own funds or repayment of liabilities from
the counterparty to the institution.
8.1.18 G In relation to article 113(6)(d), the FCA will consider that if an undertaking is
of a type that falls within the scope of the Council Regulation of 29 May
2000 on insolvency proceedings (Regulation 1346/2000/EC) and it is
established in the UK other than by incorporation, and if the firm can
demonstrate that the counterparty's centre of main interests is situated in the
UK within the meaning of that Regulation, then the condition in article
113(6)(d) will be deemed to be satisfied.
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