1.   Competent authorities may exempt a Union parent undertaking from prudentially consolidating a relevant entity as referred to in Article 2 where the sum of its total assets and of its off-balance sheet items, excluding assets under management or safekeeping, is less than the smaller of the following thresholds:

(a)	EUR 10 million;

(b)	1 % of the total amount of consolidated assets and consolidated off-balance sheet items of the Union parent undertaking, excluding that relevant entity’s assets under management and assets and off-balance sheet items.

2.   Competent authorities cannot exempt the Union parent undertaking from prudentially consolidating entities referred to in paragraph 1 where the sum of total assets and of off-balance sheet items, excluding assets under management of these entities exceeds any of the thresholds referred to in paragraph 1, points (a) or (b).

3.   Competent authorities may exempt a Union parent undertaking from prudentially consolidating a relevant entity as referred to in Article 2 where any of the following conditions is met:

(a)	the relevant entity is situated in a third country where there are legal impediments to the transfer of the information needed for the prudential consolidation;

(b)	the relevant entity is of negligible interest only with respect to the objectives of supervision of the investment firm group;

(c)	the consolidation of the financial situation of the relevant entity would be inappropriate or misleading as far as the objectives of the supervision of the investment firm group are concerned.