The condition of a reasonable prospect that the support provided significantly redresses the financial difficulties of the group entity receiving the financial support ("receiving entity") shall be considered as being met, where such prospect of redress is supported by the following elements:
the capital and liquidity needs of the receiving entity identified by a description of the capital and liquidity situation of the receiving entity and a projection of its capital and liquidity needs are covered for a sufficient period of time, taking into account all other relevant financial sources from which those needs could be met, the timescale required to redress the financial difficulties and the term of the support;
the analysis of the financial situation and of the internal and external causes for the financial difficulties, in particular of the business model and the risk management of the receiving entity, and of past, present and expected market conditions does not contradict the prospect of redress;
an action plan describing measures for the redress of the financial situation of the receiving entity, including where necessary a revision of its business model and risk management;
the underlying assumptions in the descriptions and projections mentioned in points (a), (b) and (c) are coherent and plausible and take into account the stressed condition of the receiving entity, the current market conditions and potential adverse developments.
When assessing the condition referred to in paragraph 1, the competent authority of the group entity providing financial support shall take into account information and assessments provided by the competent authority responsible for the receiving entity.
Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.
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