Regulation (EU) No 575/2013 of the European Parliament and of the CouncilShow full title

[X1 Article 89 U.K. Risk weighting and prohibition of qualifying holdings outside the financial sector

1 . A qualifying holding, the amount of which exceeds 15 % of the eligible capital of the institution, in an undertaking which is not one of the following shall be subject to the provisions laid down in paragraph 3:

( a ) a financial sector entity;

( b ) an undertaking, that is not a financial sector entity, carrying on activities which the competent authority considers to be any of the following:

(i)

a direct extension of banking;

(ii)

ancillary to banking;

(iii)

leasing, factoring, the management of unit trusts, the management of data processing services or any other similar activity.

2 . The total amount of the qualifying holdings of an institution in undertakings other than those referred to in points (a) and (b) of paragraph 1 that exceeds 60 % of its eligible capital shall be subject to the provisions laid down in paragraph 3.

3 . Competent authorities shall apply the requirements laid down in point (a) or (b) to qualifying holdings of institutions referred to in paragraphs 1 and 2:

( a ) for the purpose of calculating the capital requirement in accordance with Part Three, institutions shall apply a risk weight of 1 250  % to the greater of the following:

(i)

the amount of qualifying holdings referred to in paragraph 1 in excess of 15 % of eligible capital;

(ii)

the total amount of qualifying holdings referred to in paragraph 2 that exceed 60 % of the eligible capital of the institution;

( b ) the competent authorities shall prohibit institutions from having qualifying holdings referred to in paragraphs 1 and 2 the amount of which exceeds the percentages of eligible capital laid down in those paragraphs.

Competent authorities shall publish their choice of (a) or (b).

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Editorial Information

X1 Substituted by Corrigendum to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

Textual Amendments

F1 Art. 89(4) omitted (31.12.2020) by virtue of The Capital Requirements (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1401), regs. 1(3), 101 (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)