Application of large exposure rules towards companies designated as financial holding companies

Should exposures of a financial holding company (Company A) to a company that is not an institution or a financial institution and is not covered by prudential consolidation ("Company B") be included in the statement of large exposures on a prudential consolidated basis at the level of Company A, taking into account Company A is not an institution within the meaning of Art. 4, Para. 3 of Regulation 575/2013?

A joint-stock company ("Company A") is a commercial company that is not an institution within the meaning of Art. 4, Para. 3 of Regulation 575/2013, but is identified as a financial holding company within the meaning of Art. 4, Para. 20 of Regulation 575/2013. Company A has exposures (shareholdings and receivables under commercial agreements) to a subsidiary joint stock company ("Company B") before Company A had been qualified as a financial holding company or even Regulation 575/2013 was adopted. Company B is neither an institution nor a financial institution within the meaning of Regulation 575/2013 and is not covered by the prudential consolidation under Art. 11 Regulation 575/2013. According to Art. 11, Para. 1 of Regulation 575/2013, parent institutions in a Member State shall comply, to the extent and in the manner set out in Article 18 of Regulation 575/2013, with the obligations laid down in Part IV (“Large Exposures”) on the basis of their consolidation situation. According to Art. 11, Para. 2 of Regulation 575/2013, or the purpose of ensuring that the requirements of the Regulation are applied on a consolidated basis, the terms "institution", "parent institution in a Member State", "EU parent institution" and "parent undertaking" shall also refer to a financial holding company. According to Art. 394, Para. 1 of Regulation 575/2013, institutions shall report to their competent authorities certain information on their large exposures. According to Art. 391 of Regulation 575/2013, for the purposes of calculating the value of exposures the term “institution” shall include a private or public undertaking, including its branches, which, were it established in the Union, would fulfil the definition of the term “institution” and has been authorized in a third country that applies prudential supervisory and regulatory requirements at least equivalent to those applied in the Union.