AI Summary of Article 43 Significant investment in a financial sector entity
The criteria for determining a significant investment by an institution in a financial sector entity hinge on three key conditions. Firstly, if the institution holds over 10% of the Common Equity Tier 1 instruments of the entity, it qualifies as a significant investment. Secondly, ownership of these instruments, coupled with close links to the entity, also satisfies this definition.
Lastly, an institution may be deemed to have made a significant investment if it owns these instruments and the entity, while not consolidated under Chapter 2 of Title II of Part One, is included in the same accounting consolidation for financial reporting purposes.
Article 43 Significant investment in a financial sector entity
For the purposes of deduction, a significant investment of an institution in a financial sector entity shall arise where any of the following conditions is met:
(a) the institution owns more than 10 % of the Common Equity Tier 1 instruments issued by that entity;
(b) the institution has close links with that entity and owns Common Equity Tier 1 instruments issued by that entity;
(c) the institution owns Common Equity Tier 1 instruments issued by that entity and the entity is not included in consolidation pursuant to Chapter 2 of Title II of Part One but is included in the same accounting consolidation as the institution for the purposes of financial reporting under the applicable accounting framework.