4.1 General considerations

Competent authorities may exempt an investment firm which meets the conditions for qualifying as a small and non‐interconnected investment firm as set out in Article 12(1) of Regulation (EU) 2019/2033 from the liquidity requirements set out in Article 43(1) of Regulation (EU) 2019/2033 where an investment firm fulfils the criteria for the exemption set out in these guidelines.

Where a competent authority has imposed specific liquidity requirements under Article 42 of Directive (EU) 2019/2034 on an investment firm, such an investment firm can be exempted from liquidity requirements only when it ceases to be subject to such specific liquidity requirements in accordance with Article 42 of Directive (EU) 2019/2034.

Competent authorities should exempt an investment firm from the liquidity requirements under Article 43(1) of Regulation (EU) 2019/2033 only based on an investment firm’s request to be exempted. Together with such a request, the investment firm should provide all information necessary for the competent authority to assess if the requirements of these guidelines are met. That information should include a description of the investment firm’s activity and how the investment firm fulfils the requirements for the exemption.