The latest draft Regulations anticipating Brexit relate to capital resources requirements. The draft Capital Requirements (Amendment)(EU Exit) Regulations 2018 are intended to make sure the CRR can continue to operate effectively once the UK has left the EU. Key changes the draft addresses relate to:
- group consolidation so as to amend the geographical scope of group consolidation provisions to restrict consolidation to the UK;
- EU27 exposures, to remove preferential treatment;
- macroprudential measures, to ensure that the UK can continue to use measures that currently require approval from the EU institutions;
- transfer of functions, to ensure UK bodies can carry out functions currently reserved to the EBA or ESMA;
- equivalence, to allow Treasury to make equivalence decisions while carrying into UK law all existing equivalence decisions;
- information sharing and co-operation, to remove requirements to co-operate with other EU regulators, so the UK will rely on discretionary agreements to do so;
- savings provisions, to impute to PRA or FCA decisions taken on or before exit day by other regulators; and
- addressing problems caused by the CRR linking to other EU legislation.