ELM 7.7 Waiver

Article 731of 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 ancillary services undertaking1 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)

   where1 the undertaking concerned1 is situated in a third country where there are legal impediments to the transfer of the necessary information;

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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 concerned1 would be inappropriate or misleading as far as the objectives of the supervision of credit institutions are concerned.

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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.