1.   A competent authority may require the full or proportional consolidation of a subsidiary or an undertaking in which an institution holds a participation where that subsidiary or undertaking is not an institution, financial institution or ancillary services undertaking pursuant to Article 18(8) of Regulation (EU) No 575/2013, provided that it carries out an assessment that verifies that the condition set out in Article 18(8), point (b), of Regulation (EU) No 575/2013 is being met. For that purpose, Article 4(2) and (3) of this Regulation shall apply.

2.   Competent authorities may, in particular, require full consolidation of the subsidiary or undertaking referred to in paragraph 1 where, as a consequence of the organisational and financial relationships between the institution and the subsidiary or undertaking concerned, the institution is exposed to the majority of the risks or the benefits arising from the relevant activities of that subsidiary or undertaking.

3.   Competent authorities may in particular require proportional consolidation of an undertaking referred to in paragraph 1 according to the share of capital held in that undertaking where either of the following conditions is met:

(a)

the undertaking is jointly controlled by the institution together with one or more undertakings not included in the consolidation pursuant to a legally enforceable contractual arrangement between them or to clauses of the undertaking’s memoranda or articles of association and the decisions about the undertaking’s relevant activities require the unanimous consent of all the participating undertakings;

(b)

there is a contractual agreement between the institution and one or more shareholders, owners or members of the undertaking to jointly provide financial support to that undertaking or there is strong evidence that they would financially support the undertaking according to the share of capital held in it.