This article outlines the conditions under which parent institutions may include certain subsidiaries in their regulatory capital calculations, as stipulated by Directive 2013/36/EU. Specifically, it permits such inclusion provided that the parent institution demonstrates to its competent authority that there are no significant legal or practical barriers to transferring own funds or repaying liabilities from the subsidiary.

Further, the article mandates that competent authorities regularly, at least annually, notify other Member States and, when applicable, third-country authorities about the usage of this provision, ensuring transparency and consistent regulatory oversight in cross-border financial structures.