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MIFIDPRU 5.10 Exclusions


1The requirements in MIFIDPRU 5.4 to 5.9 do not apply to the following exposures:

  1. (1)

    exposures which are entirely deducted from a MIFIDPRU investment firm’s own funds;

  2. (2)

    exposures incurred in the ordinary course of the settlement of payment services, foreign currency transactions, securities transactions and the provision of money transmission;

  3. (3)

    exposures constituting claims against:

    1. (a)

      central governments, central banks, public sector entities, international organisations or multilateral development banks and exposures guaranteed by or attributable to such persons, where those exposures would receive a 0% risk weight under articles 114 to 118 of the UK CRR;

    2. (b)

      regional governments and local authorities of the UK or a third country which pose no difference in risk compared to a central government covered by (a); and

    3. (c)

      central counterparties and default fund contributions to central counterparties;

  4. (4)

    exposures incurred by a firm to its parent undertaking, to other subsidiaries or connected undertakings of that parent undertaking or to its own subsidiaries or connected undertakings, insofar as those undertakings are supervised on a consolidated basis in accordance with MIFIDPRU 2.5 or with UK CRR, are supervised for compliance with the group capital test in accordance with MIFIDPRU 2.6, or are supervised in accordance with comparable standards in force in a third country, and provided that the following conditions are met:

    1. (a)

      there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities; and

    2. (b)

      the risk evaluation, measurement and control procedures of the parent undertaking include the firm and any relevant subsidiary or connected undertaking.