11.2 SREP capital assessment and investment firm-specific prudential requirements

The determination of capital adequacy and requirements in accordance with the process described in Title 7 for cross-border investment firms groups is part of the discussion within the college of supervisors.

The exercise of supervisory powers and the taking of supervisory measures, including with regard to imposing additional own funds pursuant to Article 39(2)(a) of Directive (EU) 2019/2034 at consolidated or individual entity level as specified in Title 7 should be discussed in the college of supervisors.

In the context of discussions on the adequacy of the level of own funds and determining additional own funds requirement, competent authorities should consider:

• a. the assessment of the materiality of risks and deficiencies identified at both consolidated and individual entity level (i.e. which risks are material to the group as a whole and which are material to just one entity) and the level of own funds required to cover such risks;
• b. where deficiencies identified are common across all entities, coordinating the assessment and supervisory response, and in particular, deciding whether measures should be imposed at a consolidated level or proportionally at entity level for the entities where common deficiencies are present;
• c. outcomes of the supervisory benchmark calculations used to determine additional own funds requirement for all entities within the group and at a consolidated level;
• d. additional own funds requirement to be imposed on entities and at a consolidated level to ensure there is consistency of final own funds requirements and whether there is a need for transferring own funds from consolidated to entity level; and
• e. determination of P2G for parent or subsidiary investment firm, or at consolidated level.

The capital requirement and other capital measures, if applicable, should be set at consolidated and solo levels. For the sub-consolidated level, the capital requirement and other capital measures should cover only the parent undertaking of the sub-consolidated group to avoid double counting of additional own funds requirement considered by competent authorities for subsidiaries in other Member States.