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Title[ Part 4: The Third Pillar — Market Discipline

Section[ B. Scope of application

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822.     Pillar 3 applies at the top consolidated level of the banking group to which this Framework applies (as indicated above in Part 1: Scope of Application). Disclosures related to individual banks within the groups would not generally be required to fulfil the disclosure requirements set out below. An exception to this arises in the disclosure of Total and Tier 1 Capital  Ratios  by  the  top  consolidated  entity  where  an  analysis  of  significant  bank subsidiaries  within  the  group  is  appropriate,  in  order  to  recognise  the  need  for  these subsidiaries to comply with this Framework and other applicable limitations on the transfer of funds or capital within the group.

Table 1

Scope of application

Qualitative Disclosures

(a)        The name of the top corporate entity in the group to which this Framework applies.

(b)        An outline of differences in the basis of consolidation for accounting and regulatory purposes, with a brief description of the entities ¹²²  within the group (a) that are fully consolidated; ¹²³ (b) that are pro-rata consolidated; ¹²⁴ (c) that are given a deduction treatment;125 and (d) from which surplus capital is recognised¹²⁵ plus (e) that are neither consolidated nor deducted (e.g. where the investment is risk-weighted).

(c)        Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group.

Quantitative Disclosures

(d)        The aggregate amount of surplus capital ¹²⁶ of insurance subsidiaries (whether ¹²⁷) included in the capital of the deducted or subjected to an alternative method consolidated group.

122 Entity = securities, insurance and other financial subsidiaries, commercial subsidiaries, significant minority equity investments in insurance, financial and commercial entities.

123 Following the listing of significant subsidiaries in consolidated accounting, e.g. IAS 27.

124 Following the listing of subsidiaries in consolidated accounting, e.g. IAS 31.

125 May be provided as an extension (extension of entities only if they are significant for the consolidating bank) to the listing of significant subsidiaries in consolidated accounting, e.g. IAS 27 and 32.

126 Surplus  capital  in  unconsolidated  regulated  subsidiaries  is  the  difference  between  the  amount  of  the investment in those entities and their regulatory capital requirements.

127 See paragraphs 30 and 33.

(e)        The aggregate amount of capital deficiencies ¹²⁸ in all subsidiaries not included in the consolidation i.e. that are deducted and the name(s) of such subsidiaries.

(f)         The aggregate amounts (e.g. current book value) of the firm’s total interests in insurance entities, which are risk-weighted ¹²⁹ rather than deducted from capital or subjected to an alternate group-wide method, ¹³⁰ as well as their name, their country of incorporation or residence, the proportion of ownership interest and, if different, the proportion of voting power in these entities. In addition, indicate the quantitative impact on regulatory capital of using this method versus using the deduction or alternate group-wide method.

128 A capital deficiency is the amount by which actual capital is less than the regulatory capital requirement. Any deficiencies which have been deducted on a group level in addition to the investment in such subsidiaries are not to be included in the aggregate capital deficiency.

129 See paragraph 31.

130 See paragraph 30.

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