ELM 7.7 Waiver

Article 52(3)of the Banking Consolidation Directive says that competent authorities responsible for exercising supervision on a consolidated basis may decide that a credit institution, financial institution or auxiliary banking services undertaking which is a subsidiary or in which a participation is held need not be included in the consolidation in certain cases. These include the following:

1. (1)

   if the undertaking that should be included is situated in a third country where there are legal impediments to the transfer of the necessary information;

2. (2)

   if, in the opinion of the competent authorities responsible for exercising supervision on a consolidated basis, the consolidation of the financial situation of the undertaking that should be included would be inappropriate or misleading as far as the objectives of the supervision of credit institutions are concerned.

It is generally the FSA's policy to agree to a firm's request to modify the rules in ELM 7 so as to exclude undertakings from the consolidation in the cases listed in ELM 7.7.1 G if section 148 of the Act allows this. See SUP 8 (waiver and modification of rules) for information on how to apply for such a modification.