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According to the CRR, the entities included in the scope of prudential consolidation are institutions (i.e. credit institutions and investment firms), financial institutions and, when consolidated supervision is required, ancillary services undertakings.
As a general rule, institutions shall apply full consolidation to their subsidiaries, or, where relevant, to the subsidiaries of their parent financial holding company or parent mixed financial holding company. However, under certain circumstances, and depending on the links between the entities, the CRR allows the application of other methods of consolidation, such as proportional consolidation. In addition, when consolidation is not appropriate the equity method may also be applied. These draft RTS specify the criteria, indicators and conditions that institutions need to meet for the application of different methods of consolidation or of the equity method.
Comments to this consultation can be sent to the EBA by 09 February 2018. A public hearing will take place at the EBA premises on 22 January 2018 from 13.30 to 15.30 UK time.