1.By way of derogation from Article 31 competent authorities may authorise the application of a lower outflow rate on a case by case basis for undrawn credit or liquidity facilities when all of the following conditions are fulfilled:
(a)there are reasons to expect a lower outflow even under a combined market and idiosyncratic stress of the provider;
(b)the counterparty is the parent or subsidiary institution of the credit institution or another subsidiary of the same parent institution or linked to the institution by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC (^{9})(^{10}) or a member of the same institutional protection scheme referred to in Article 113(7) of Regulation (EU) No 575/2013 or the central institution or an affiliate of a network or cooperative group as referred to in Article 10 of that Regulation;
(c)the lower outflow rate does not fall below the inflow rate applied by the counterparty;
(d)the credit institution and the counterparty are established in the same Member State.
2.Competent authorities may waive the condition set out in point (d) of paragraph 1 where Article 20(1)(b) of Regulation (EU) No 575/2013 is applied. In that case, the following additional objective criteria have to be met:
(a)the liquidity provider and receiver will present a low liquidity risk profile after the application of the lower outflow rate being proposed under paragraph 1 and the application of the inflow rate referred to in point (c) of that paragraph;
(b)there are legally binding agreements and commitments between the group entities regarding the undrawn credit or liquidity line;
(c)the liquidity risk profile of the liquidity receiver is taken into account adequately in the liquidity risk management of the liquidity provider.
Where such a lower outflow rate is permitted to be applied, the competent authority shall inform EBA about the result of the process referred to in Article 20(1)(b) of Regulation (EU) No 575/2013. Fulfilment of the conditions for such lower outflows shall be regularly reviewed by the competent authority.