(1) If the group reaches the threshold referred to in regulation 16(1)(a) or (b) but the smallest sector does not exceed EUR 6 billion, the relevant competent authorities may decide by common agreement not to regard the group as a financial conglomerate.

(2) The relevant competent authorities may also decide not to apply the provisions on risk concentration, intra-group transactions and internal control mechanisms and risk management processes in -

(a) Chapter 3 of the FCA General Prudential sourcebook, Chapter 12 of the FCA Senior Management Arrangements, Systems and Controls sourcebook, or

(b) the Financial Conglomerates part of the PRA Rulebook;

if the application of such provisions is not necessary or would be inappropriate or misleading with respect to the objectives of supplementary supervision.

(3) Decisions taken in accordance with this regulation must be notified to the other competent authority.