(1) Where an Authorised Person has a Qualifying Holding in an Undertaking which is not one of the following:
(a) an Undertaking that is a Relevant Entity; or
(b) an Undertaking that carries on activities that are:
(i) a direct extension of banking;
(ii) ancillary to banking; or
(iii) leasing, factoring, the management of unit trusts, the management of data processing services or any other similar activity,
and the amount of the holding exceeds 15% of the eligible total Tier 1 of the Authorised Person, the Authorised Person must comply with the requirements in (3).
(2) The total amount of the Qualifying Holdings of an Authorised Person in those Undertakings referred to in (1) that exceeds 60% of its Tier 1 are subject to the requirements in (3).
(3) An Authorised Person must apply a risk weight of 1000% to the greater of the total amount of Qualifying Holdings referred to in (1) and that in (2).
(4) As an alternative to applying a 1000% risk weight to the amounts in excess of the limits specified in (1) or (2), an Authorised Person may deduct those amounts from CET1 Capital.
(5) Shares of Undertakings to which (1) or (2) do not apply must not be included in calculating the eligible capital limits specified in (1) where any of the following conditions are met:
(a) those Shares are held temporarily during a financial reconstruction or rescue operation;
(b) the holding of the Shares is an Underwriting position held for five working days or less; or
(c) those Shares are held in the name of the Authorised Person on behalf of others.