AI Summary of Article 3 Intragroup transactions
This document outlines the definition of intragroup transactions in the context of non-financial and financial counterparties, emphasising the requirement for both to be part of the same group and included in the same full consolidation. Essential centralised risk evaluation, measurement, and control procedures are mandated for both parties. Additionally, the establishment of the counterparty within the UK or a compatible third country is crucial to comply with regulatory standards.
For financial counterparties, further stipulations apply, including establishment criteria, appropriate prudential requirements, and adherence to consolidated supervision under Capital Requirements Regulation (CRR) rules. The guidance aims to ensure clarity in regulatory compliance and mitigate risk exposure within intragroup derivatives transactions.
Article 3 Intragroup transactions
1. In relation to a non-financial counterparty, an intragroup transaction is an OTC derivative contract entered into with another counterparty which is part of the same group provided that both counterparties are included in the same consolidation on a full basis and they are subject to an appropriate centralised risk evaluation, measurement and control procedures and that counterparty is established in the United Kingdom or, if it is established in a third country, the Commission has adopted an implementing act under Article 13(2) in respect of that third country before IP completion day or the Treasury have made regulations under that Article in respect of that third country after IP completion day.
2. In relation to a financial counterparty, an intragroup transaction is any of the following:
(a) an OTC derivative contract entered into with another counterparty which is part of the same group, provided that the following conditions are met: