3. Where the application of the criteria referred to in paragraph 1 of this Article would be inappropriate, the competent authorities responsible for exercising supervision on a consolidated basis pursuant to Article 111(4), (5), and (6) of Directive 2013/36/EU of the European Parliament and of the Council (9) may waive those criteria, and designate another entity within the group subject to Regulation (EU) No 575/2013 as responsible for ensuring compliance with the requirements referred to in Part One, Title II, Chapter 2, Section 1, of that Regulation on the basis of the consolidation situation of all undertakings of the group.
When assessing the appropriateness of the application of the criteria referred to in paragraph 1 of this Article, those competent authorities shall take into account any decision taken in accordance with Article 111(6) of Directive 2013/36/EU or, in the absence of such decision, the institutions concerned and the relative importance of their activities in the relevant Member States or whether they are required to prepare consolidated financial statements for the group in the cases referred to in Article 22(7) of Directive 2013/34/EU. In such cases, the institution with the largest balance sheet total shall have the right to be heard, before the competent authorities take the decision.