Scope of application of the exemption from the cap on inflows in the Liquidity Coverage Ratio

Articles 33(3) and (4) of the Delegated Regulation (EU) 2015/61 provide for a competent authority discretion to exempt certain specialised credit institutions  from the Article 33(1) 75% inflow cap, when they comply with the conditions set out in paragraph 5. As stated in Article 33(6) of the Delegated Regulation (EU) 2015/61 and clarified by the EBA Q&A 2016_2870 these exemptions may be granted by the competent authority at an individual and/or consolidated (sub-consolidated) level subject to the compliance with the requirements set out in Article 33(5) at an individual and/or consolidated (sub-consolidated) level respectively. When a liquidity waiver is granted pursuant to Article 8 of Regulation (EU) No 575/2013 (CRR), all the institutions involved are merged to form a single liquidity group or sub-group and will then have to comply with liquidity requirements at consolidated or sub-consolidated level. Consistently, a liquidity group or sub-group only benefits from regulatory exemptions at consolidated or sub-consolidated level. As a result, a liquidity group or sub-group which stands to benefit from a cap exemption or a 90% cap according to Article 33 of the Delegated Regulation (EU) 2015/61 has to comply with all the criteria at a consolidated or sub-consolidated level. Notwithstanding the wording of Article 33(5) letter (a) ii) and letter (b) of the Delegated Regulation (EU) 2015/61, the legal basis for compliance with all the criteria set out in Article 33(5) is the total inflows at the consolidated or sub-consolidated level. Accordingly, competent authorities may only allow a liquidity group or sub-group to apply a preferential treatment at consolidated or sub-consolidated level for all of its inflows to the extent that the requirements set out in Article 33(5) of the Delegated Regulation (EU) 2015/61 are met at consolidated or sub-consolidated level. Therefore, referring to the concrete case provided in the question, a liquidity sub-group cannot apply for the exemption of the inflow cap in accordance with Article 33(4) and Article 33(5) of the Delegated Regulation (EU) 2015/61 for the cash inflows generated by only one institution in the liquidity sub-group.