Recital 1

(1)Identifying ‘groups of connected clients’ as defined in Article 4(1), point (39) of Regulation (EU) No 575/2013 should lead to the identification of natural or legal persons so closely linked by idiosyncratic risk factors that it is prudent to treat them as a single risk. Where it is unclear under which specific category of connections the interconnection between different persons should be classified, a general principle of prudence should prevail and it should be assumed that a single risk exists. Therefore, the circumstances under which the conditions for identifying groups of connected clients are met should be understood as non-exhaustive lists. Cases where natural or legal persons are only linked through their dependence to common geographical or sectoral external factors should not lead to a group of connected clients.