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The FSA received three responses to the consultation, which covered rules that have, since 1 April 2013, been designated as rules made respectively by the FCA or the PRA.
The three respondents supported the proposed general approach of copying the Directive text into FCA’s Handbook without supplementary provisions or guidance. One respondent noted that the introduction of the new threshold test 3A in the financial conglomerate decision tree (GENPRU 3 Annex 4R) implies an automatic exemption from conglomerate status. As indicated in the Consultation Paper, an exemption under threshold test in FICOD1 Article 3(3a) is only available at the discretion of the coordinator, in consultation with other competent authorities, in the same way as is currently the case for an exemption under threshold test 3 in FICOD1 Article 3.3. Where the FCA or PRA is the coordinator, firms would be able to apply to the appropriate regulator for a waiver or rule modification, which would provide an exemption on the basis of FICOD1 Articles 3(3) or 3(3a). The decision tree will therefore remain as currently in force.
One respondent wanted more clarity on our proposed approach to conglomerate stress testing and also whether the industry would be consulted if future guidance by European Supervisory Authorities was issued. For financial conglomerates, case-specific stress testing parameters will be agreed between the supervisor and the conglomerate. They will then be carried out on the individual sectors at the same time rather than in sector silos at differing times. The European Supervisory Authorities may consult on policies and guidelines. The FCA can confirm that if EU-wide stress-testing guidance requires changes to the rulebook then the FCA will consult on such changes.
All respondents agreed with FCA's proposed approach to allow financial conglomerates to choose their group solvency calculation method after consulting with the FCA.
One respondent commented that the transparency requirements in SUP 15.9 should apply only at the level of the ultimate mixed financial holding company in the EEA. FCA has amended the handbook text to clarify the level at which certain reporting and disclosure requirement in SUP 15.9.