Determination of the own funds resources of institutional groups, financial holding groups, and mixed financial holding groups; power to issue a statutory instrument

(1) An institutional group consists of a parent undertaking and one or more subsidiary undertakings. Parent undertakings are CRR credit institutions or large securities institutions within the meaning of section 2(18) of the Securities Institutions Act that are required to carry out consolidation under Article 11 of Regulation (EU) No 575/2013, and institutions that are required to carry out consolidation under section 1a in conjunction with Article 11 of Regulation (EU) No 575/2013. Subsidiary undertakings are undertakings that are to be consolidated, or are voluntarily consolidated, under Article 18 of Regulation (EU) No 575/2013; institutions deemed CRR credit institutions under section 1a that do not hold exclusively a licence to carry on the activity of a central counterparty within the meaning of section 1(1), second sentence, point 12, are in this respect deemed institutions within the meaning of Article 18 of Regulation (EU) No 575/2013. By way of derogation from the second sentence, the Federal Institute may, on the application of the parent undertaking, designate another institution belonging to the group as the parent undertaking; the institution belonging to the group must be heard beforehand. Where, in the case of reciprocal holdings, no undertaking of the institutional group meets the conditions of the second sentence, the Federal Institute designates the group's parent undertaking. Where the parent undertaking is a credit institution that holds exclusively a licence to carry on the activity of a central counterparty within the meaning of section 1(1), second sentence, point 12, or a financial services institution that provides exclusively financial services within the meaning of section 1(1a), second sentence, points 9 or 10, an institutional group within the meaning of this provision exists only where at least one CRR credit institution with its registered office in Germany is subordinate to it as a subsidiary undertaking.
(2) A financial holding group or a mixed financial holding group consists of a parent undertaking and one or more subsidiary undertakings. The parent undertaking is the undertaking required to carry out consolidation under Article 11 of Regulation (EU) No 575/2013. Subsidiary undertakings are undertakings that are to be consolidated, or are voluntarily consolidated, under Article 18 of Regulation (EU) No 575/2013. Institutions deemed CRR credit institutions under section 1a that do not hold exclusively a licence to carry on the activity of a central counterparty within the meaning of section 1(1), second sentence, point 12, are in this respect deemed institutions within the meaning of Article 18 of Regulation (EU) No 575/2013. The Federal Institute has, with regard to a parent undertaking under the second sentence and its governing bodies, all the powers that it has with regard to an institution as parent undertaking and its governing bodies.
(3) The supervisory authority responsible under section 2f(1) may, in an individual case and having regard to section 2f(8), exclude financial holding companies or mixed financial holding companies that it has exempted from the licensing requirement under section 2f(1) pursuant to section 2f(4), first sentence, from the scope of consolidation under this Act and Regulation (EU) No 575/2013, where
1. the exclusion does not impair the effectiveness of the supervision of the subsidiary credit institution or the group,
2. the financial holding company or mixed financial holding company does not hold any holdings other than the holding in the subsidiary credit institution or in the intermediate parent financial holding company or intermediate mixed parent financial holding company that controls the subsidiary credit institution, and
3. the financial holding company or mixed financial holding company does not rely on debt to a significant extent and has no risk exposures other than those connected with its ownership of the subsidiary credit institution or of the intermediate parent financial holding company or intermediate mixed parent financial holding company that controls the subsidiary credit institution.
(4) To determine the adequacy of own funds under Articles 92 to 386 of Regulation (EU) No 575/2013, as amended from time to time, at the consolidated level, and to limit large exposure risks under Articles 387 to 403 of Regulation (EU) No 575/2013, the parent undertakings must in each case aggregate the group's own funds and the relevant risk exposures. From the own funds to be aggregated under the first sentence, the carrying amounts attributable to undertakings belonging to the group of the capital instruments under Article 26(1)(a), Article 51(a), and Article 62(a) of Regulation (EU) No 575/2013, as amended from time to time, must be deducted. For holdings mediated through undertakings not belonging to the group, such carrying amounts must in each case be deducted pro rata in the amount of the proportion corresponding to the traced-through capital participation. Where the carrying amount of a holding is higher than the portion of the subsidiary undertaking's Common Equity Tier 1 capital items under Article 26(1) of Regulation (EU) No 575/2013, as amended from time to time, to be aggregated under the first sentence as own funds, the parent undertaking must deduct the difference from the group's Common Equity Tier 1 capital under Article 50 of Regulation (EU) No 575/2013, as amended from time to time. The counterparty default exposures arising from legal relationships between undertakings belonging to the group are not to be taken into account. For subsidiary undertakings that are not subsidiary companies, the parent undertaking must aggregate its own funds and the risk exposures relevant under Regulation (EU) No 575/2013, as amended from time to time, with the own funds and relevant risk exposures of the subsidiary undertakings, in each case pro rata in the amount of the proportion corresponding to its capital participation in the subsidiary undertaking. In other respects, the second to fifth sentences apply correspondingly, including in each case in conjunction with the statutory instrument under subsection (7).
(5) Where the parent undertaking of an institutional group is required, under the provisions of the Commercial Code, to draw up consolidated financial statements, or is required, under Article 4 of Regulation (EC) No 1606/2002 or under section 315e(2) of the Commercial Code, to apply, when drawing up the consolidated financial statements, the international accounting standards adopted under Articles 3 and 6 of Regulation (EC) No 1606/2002, it must, once the respective obligation arises, base the determination of the aggregated own funds and the aggregated risk exposures under Articles 24 to 386 of Regulation (EU) No 575/2013 on the consolidated financial statements. Where the parent undertaking of an institutional group applies the international accounting standards named above under section 315e(3) of the Commercial Code, the first sentence applies correspondingly; the first-time application of the international accounting standards takes the place of the obligation to apply them arising. Subsection (4) does not apply in the cases under the first and second sentences. In these cases, the own funds and other relevant risk exposures of undertakings that are included in the consolidated financial statements and are not undertakings belonging to the group within the meaning of this provision are disregarded. Own funds and other relevant risk exposures of undertakings not included in the consolidated financial statements that are undertakings belonging to the group within the meaning of this provision must be added, whereby the procedure under subsection (4) may be applied. The first to fifth sentences apply correspondingly to a financial holding group or a mixed financial holding group, where the financial holding company or the mixed financial holding company is required, under the provisions named above, to draw up consolidated financial statements, or draws up consolidated financial statements under the international accounting standards named above pursuant to section 315e(3) of the Commercial Code.
(6) The Federal Ministry of Finance is empowered, by statutory instrument not requiring the consent of the Bundesrat, in consultation with the Deutsche Bundesbank, to issue more detailed provisions on determining the own funds resources of groups, in particular on
1. converting particulars from the consolidated financial statements into the determination of the aggregated own funds resources when applying the procedure under subsection (5),
2. the treatment of holdings measured under the equity method when applying the procedure under subsection (5). The Federal Ministry of Finance may, by statutory instrument, transfer the power to the Federal Institute, on the condition that the statutory instrument is issued in agreement with the Deutsche Bundesbank. Before issuing the statutory instrument, the institutions' umbrella associations must be heard.
(7) The parent undertaking must continuously ensure, on a consolidated basis, that the respective group complies with all requirements under this Act or under Regulation (EU) No 575/2013 as amended on 17 June 2025, in particular
1. compliance with the requirements laid down in Parts Three, Four, Six, and Seven of Regulation (EU) No 575/2013 as amended on 17 June 2025,
2. holding the additional own funds ordered under section 6c(1), first sentence, and
3. meeting the specific liquidity requirements ordered under section 11(3), first sentence. However, it may, to meet its obligations under the first sentence, influence the undertakings belonging to the group only insofar as generally applicable company law does not preclude this.
(8) Groups are exempted from applying the requirements under Articles 11 to 23 of Regulation (EU) No 575/2013 on a consolidated basis, where none of the institutions belonging to the group are required to apply Articles 92 to 386, 429 to 429g, and Article 430(1), first subparagraph, points (a), (b), (e) to (g), and (2) to (5), and Articles 430a and 430b of Regulation (EU) No 575/2013 at individual institution level, unless they were exempted under Article 7 of Regulation (EU) No 575/2013 from applying Articles 92 to 386, 429 to 429g, Article 430(1), first subparagraph, points (a), (b), (e) to (g), and (2) to (5), and Articles 430a and 430b of Regulation (EU) No 575/2013 at individual institution level.
(9) Subsections (4) to (8) apply correspondingly to sub-consolidation under Article 22 of Regulation (EU) No 575/2013.