Market risk capital requirement for CIUs where a look-through approach is applied

Can the market risk capital requirement for CIUs where a look-through approach based on the underlying investments is applied be capped at the amount applicable if no look-through approach would be applied?

If an institution is aware of the underlying investments of a CIU on a daily basis, the market risk capital requirement may be determined by a look-through to the underlying investments, see CRR Art. 350 (1). If the underlying investments are not known on a daily basis the market risk capital requirement is in general determined based on CRR Art. 348 as 32% for position risk. Alternatively CRR Art. 350 (3) allows for a look-through based on the mandate of the CIU. If CRR Art. 350 (3) is applied, the CRR in point (c) specifically introduces a cap of the market risk capital requirement at the amount that would be applicable if no look-through would be performed, i.e. 32% for position risk. As CIUs where the underlying investments are known on a daily basis operate within the limits set by their mandate, it would be appropriate to apply this 32% cap also to CIUs where a look-through based on the underlying investments is applied.