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:11
- (1) 11
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.1
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.