Article 1
Control relationship
1. Two or more natural or legal persons shall constitute a single risk because one of them, directly or indirectly, has control over the other or others where one of them is required to prepare consolidated financial statements that include the other or others in accordance with Article 22(1) and (2) of Directive 2013/34/EU of the European Parliament and of the Council (3) or the International Financial Reporting Standard (IFRS) 10, as laid down in the national law of the respective Member State.
2. Paragraph 1 shall apply also to legal persons not included in the consolidated financial statements due to exemptions or derogations set out in Directive 2013/34/EU or the IFRS 10, as laid down in the national law of the respective Member State.
3. Where paragraph 1 does not apply, two or more natural or legal persons shall constitute a single risk because one of them, directly or indirectly, has control over the other or others, in the following circumstances:
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(a) |
the natural or legal person holds the majority of the voting rights in another person or persons; |
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(b) |
the natural or legal person has the right or the ability to appoint or remove the majority of the members of the administrative, management or supervisory body of another person or persons; |
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(c) |
the natural or legal person is able to exercise dominant influence over another person or persons pursuant to a law or contract, or provisions in memoranda or articles of association. |
4. Where paragraphs 1, 2 or 3 do not apply, two or more natural or legal persons may be deemed to constitute a single risk because one of them, directly or indirectly, has control over the other or others, in any of, but not limited to, the following circumstances:
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(a) |
the natural or legal person has the right or ability to decide on the strategy or to direct the activities of another person or persons; |
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(b) |
the natural or legal person has the right or ability to decide on important transactions, including the transfer of profits or losses of another person or persons; |
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(c) |
the natural or legal person has the right or ability to coordinate the management of one or more legal persons. |
5. By way of derogation from paragraphs 1, 2 and 3, where, in exceptional cases, an institution is able to demonstrate that no single risk prevails despite the circumstances referred to in those paragraphs being met with regard to two or more natural or legal persons, the institution may not identify those persons as a group of connected clients.
(3) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).