Groups

1.1

This Part applies to every firm that is a CRR firm.

1.2

In this Part the following definitions shall apply:

third country banking and investment group

means a group that meets the following conditions:

1. (1) it is headed by a third country undertaking that would be:
1. (a) an institution;
2. (b) a financial holding company, or
3. (c) a mixed financial holding company,
4. if its head office was in the EEA; and
2. (2) it is not part of a wider consolidation group.

intermediate EU parent undertaking

means a parent undertaking with its head office in one of the EEA states.

1.3

Unless otherwise defined:

1. (1) any italicised expression used in this Part and in the CRR has the same meaning as in the CRR; and
2. (2) any italicised expression used in this Part and in the CRD has the same meaning as in the CRD.

2.1

1. (1) In carrying out the calculations in (Part One, Title II, Chapter 2 of the CRR) for the purposes of prudential consolidation, a firm must include the relevant proportion of an undertaking with whom it has an:
1. (a) Article 22(7) relationship; or
2. (b) Article 18(6) relationship.
2. (2) In 2.1(1), the relevant proportion is such proportion (if any) as stated in a requirement imposed on the firm in accordance with section 55M of FSMA.

[Note: Art 18(3) and (6) of the CRR]

2.2

In carrying out the calculations in Part One, Title II, Chapter 2 of the CRR for the purposes of prudential consolidation, a firm (for which the PRA is the consolidating supervisor) must carry out a proportional consolidation according to the share of capital held of participations in institutions and financial institutions managed by an undertaking included in the consolidation together with one or more undertakings not included in the consolidation, where those undertakings' liability is limited to the share of capital they hold.

[Note: Art 18(4) of the CRR]

2.3

In carrying out the calculations in Part One, Title II, Chapter 2 of the CRR for the purposes of prudential consolidation, a firm must carry out a proportional consolidation according to the share of capital held of any undertaking with whom it has an Article 18(5) relationship.

[Note: Art 18(5) of the CRR]

3.1

This Chapter applies where a firm is subject to a requirement obliging it to comply with 3.2 to 3.4 with respect to a third country banking and investment group of which it is a member.

[Note: Art 127 of the CRD]

3.2

A firm must comply with:

1. (1) those requirements of the CRR that apply to the firm on a consolidated basis; and
2. (2) rules that apply to the firm on a consolidated basis,

on the basis of the consolidated situation of the third country banking and investment group.

3.3

A firm must comply with Group Risk Systems in respect of the third country banking and investment group.

3.4

The scope of the CRR requirements and rules referenced in 3.2 and 3.3 is adjusted:

1. (1) to remove any provisions disapplying those rules for third country banking and investment groups;
2. (2) to remove all limitations relating to where a member of the third country banking and investment group is incorporated or has its head office; and
3. (3) so that the scope covers every member of the third country banking and investment group that would have been included in the scope of those rules if those members had their head offices, and were incorporated, in an EEA State.

4.1

(1) Subject to (2), this chapter applies to every firm that is an institution where both of the following tests are met:

(a) the firm belongs to a third country banking and investment group that includes the firm and at least one other institution in the EU; and

(b) the total value of the assets in the EU of the third country banking and investment group to which the firm belongs is equal to or greater than 40 billion euros, calculated in accordance with 4.3.

(2) This chapter shall not apply to a firm if it is a member of a third country banking and investment group operating through more than one institution in the EU that had total assets in the EU equal to or greater than 40 billion euros on 27 June 2019.

4.2

A firm referred to in 4.1 must have a single intermediate EU parent undertaking that is either:

(1) a credit institution authorised in accordance with Article 8 CRD;

(2) a financial holding company or mixed financial holding company approved in accordance with Article 21a CRD; or

(3) where none of the institutions subject to 4.1 is a credit institution, an investment firm that is authorised in accordance with Article 5.1 MiFID and is subject to BRRD.

4.3

The calculation in 4.1(1)(b) shall be as follows:

(1) The total value of the assets in the EU of the third country banking and investment group is the sum of:

(a) the total value of the assets of each institution in the EU belonging to the third country banking and investment group; and

(b) the total value of the assets of each branch of the third country banking and investment group authorised in the EU in accordance with CRD, MiFIDII or MiFIR.

(2) The total value of the assets of an institution shall be assessed:

(a) if the institution is at the head of a consolidation group, on the basis of its own consolidated situation; and otherwise

(b) on an individual basis.

(3) In making this calculation no asset or value of an asset shall be double counted.