Exclusions
Article 41
1. The following exposures shall be excluded from the requirements set out in Article 37: (a) exposures which are entirely deducted from an investment firm’s own funds; (b) exposures incurred in the ordinary course of the settlement of payment services, foreign currency transactions, securities transactions and the provision of money transmission; (c) exposures constituting claims against: (i) central governments, central banks, public sector entities, international organisations or multilateral development banks and exposures guaranteed by or attributable to such persons, where those exposures receive a 0 % risk weight under Articles 114 to 118 of Regulation (EU) No 575/2013; (ii) the regional governments and local authorities of countries that are members of the European Economic Area; (iii) central counterparties and default fund contributions to central counterparties. 2. Competent authorities may fully or partially exempt the following exposures from the application of Article 37: (a) covered bonds; (b) exposures incurred by an investment firm to its parent undertaking, to other subsidiaries of that parent undertaking or to its own subsidiaries, insofar as those undertakings are supervised on a consolidated basis in accordance with Article 7 of this Regulation or with Regulation (EU) No 575/2013, are supervised for compliance with the group capital test in accordance with Article 8 of this Regulation, or are supervised in accordance with equivalent standards in force in a third country, and provided that the following conditions are met: (i) there is no current or foreseen material practical or legal impediment to the prompt transfer of capital or repayment of liabilities by the parent undertaking; and (ii) the risk evaluation, measurement and control procedures of the parent undertaking include the financial sector entity.