4.2 Simplified group capital test permission

A competent authority should not be prevented from deeming an investment firm group to be sufficiently simple and not to pose significant risks to clients and to the market, where all the following conditions are met:

• (a) it consists only of a Union parent investment holding company or a Union parent mixed financial holding company or a Union parent investment firm which is small and non‐interconnected according to Article 12(1) of Regulation (EU) 2019/2033, of small and non‐interconnected investment firms set out in Article 12(1) of that regulation and of ancillary services undertakings;
• (b) it has put in place satisfactory organisational arrangements and sufficient risk control functions that are proportionate to the size and business model of the investment firm group;
• (c) the majority of the voting rights of each group undertaking is owned by other group undertakings;
• (d) its capital ties, its ownership structure and the contractual agreements between the Union parent investment firm, the Union parent investment holding company or the Union parent mixed financial holding company, and the undertakings of the group, as well as those among the undertakings of the group, are available to the competent authority upon request;
• (e) its capital ties, its ownership structure and the contractual agreements referred to in point
• (d) do not represent an impediment to the exercise of control by the Union parent investment firm, the Union parent investment holding company or the Union parent mixed financial holding company over the undertakings of the group;
• (f) the implications for the governance of the group as a whole of the capital ties, of the ownership structure and of the contractual agreements referred to in point (d) do not require supervision on a consolidated basis;
• (g) the own funds requirements calculated in accordance with Article 8(3) of Regulation (EU) 2019/2033 remain sufficiently close to the own funds requirements calculated in accordance with Article 7 of that regulation, at an indicative percentage greater than 85% of the latter.

Competent authorities should not be prevented from applying Sections 4.3 and 4.4 to assess whether a group capital test permission should be granted to an investment firm group that meets the condition set out in point (a) of the previous paragraph, where that group does not meet one or more of the conditions set out in points (b) to (g) of the previous paragraph.