S.L. 370.46 Art. 3Responsibility of the competent authority for consolidated supervision. 

(1) The competent authority shall exercise supervision on a consolidated basis:

(a) where the parent undertaking is a parent credit institution established in Malta or in another

Member State or an EU parent credit institution supervised by the competent authority on an individual basis;

(aa) where the parent undertaking is a parent investment firm established in Malta or in another Member State or an EU parent investment firm and none of its subsidiaries is a credit institution, if the competent authority supervises that parent investment firm or that EU parent investment firm on an individual basis;

(b) where a parent undertaking is a parent investment firm established in Malta or in another Member State or an EU parent investment firm and at least one of its subsidiaries is a credit institution supervised by the competent authority:

Provided that, where there are several credit institutions, the competent authority shall exercise supervision on a consolidated basis where it supervises the credit institution with the largest balance sheet total;

(c) where the parent of an investment firm is a parent financial holding company established in Malta or in another Member State, a parent mixed financial holding company in Malta or in another Member State, an EU parent financial holding company or an EU parent mixed financial holding company, where the competent authority supervises the investment firm on an individual basis.

(d) where two or more institutions authorised in the European Union, one of which is a credit institution supervised by the competent authority, have the same parent financial holding company established in Malta or in another Member State, parent mixed financial holding company established in Malta or in another Member State, EU parent financial holding company or EU parent mixed financial holding company, and:

(i) the competent authority supervises the credit institution, which is the only credit institution within the group; or

(ii) the competent authority supervises the credit institution with the largest balance sheet total, where there are several credit institutions within the group:

Provided that, for the purposes of this paragraph, the term "institution" shall include credit institutions and investment firms;

(iii) the competent authority supervises the investment firm with the largest balance sheet total, where the group does not include any credit institution;

(e) where consolidation is required pursuant to Article 18(3) or (6) of the CRR and the competent authority supervises the credit institution with the largest balance sheet total or, where the group does not include any credit institution, by the competent authority of the investment firm with the largest balance sheet total.

(2) By way of derogation from sub-regulation (1)(b), (d)(ii), d(iii) and (e), the competent authority shall be the consolidating supervisor where it supervises on an individual basis one or more investment firms within a group, and the sum of the balance sheet totals of those supervised investment firms is higher than that of the investment firms supervised on an individual basis by any other European regulatory authority, and there are no credit institutions in (SUPERVISORY CONSOLIDATION) 370.46 (CAPITAL REQUIREMENTS DIRECTIVE) the group.

(3) In particular cases, the criteria referred to in sub-regulation (1)(a), (b), (d) and (e) may be waived by common agreement of the competent authority with the other relevant European regulatory authorities and a European regulatory authority may be appointed to exercise supervision on a consolidated basis where the application of the criteria referred to in the said sub-regulation (1)(a), (b), (d) and (e) would be inappropriate, taking into account the credit institutions or investment firms concerned and the relative importance of their activities in the relevant Member States, or the need to ensure the continuity of supervision on a consolidated basis by the same European regulatory authority. In these cases, before such decision is taken the EU parent institution, the EU parent financial holding company, the EU parent mixed financial holding company or the institution with the largest balance sheet total, as applicable, shall have the right to be heard.

(4) The competent authority shall notify the Commission and the EBA without delay of any agreement falling within sub-regulation (3).