Laura WilesThe PRA is seeking views on three related consultations concerning:
- the restatement of CRR requirements in the PRA Rulebook;
- streamlining the Pillar 2A capital framework and capital communications process; and
- updates to the UK policy framework for capital buffers.
The first consultation above follows HMT’s announcement that it intends to revoke CRR requirements relating to the definition of own funds. It sets out the PRA’s proposed rules to restate, and occasionally modify, these requirements in its Rulebook.
The second consultation above sets out the PRA’s proposals for streamlining the Pillar 2A capital framework and communications processes. It includes plans to:
- retire the refined methodology to Pillar 2A when firms implement the Basel 3.1 standards, which are intended to take effect from 1 January 2026;
- simplify the content and process of firm-specific capital communications, with no impact on firms’ capital requirements; and
- make minor clarifications to its existing Pillar 2A approaches for interest rate risk in the banking book (IRRBB) and pension obligation risk.
The third consultation above concerns proposed amendments to the UK framework on capital buffers under HMT’s FSMA 2023 power to revoke assimilated law relating to financial services. As part of this, the PRA proposes to streamline some of its policy materials on capital buffers to enhance usability and clarity. The amendments would impact:
- PRA statement of policy;
- PRA rules referring directly to the current Capital Buffers Regulations; and
- UK Technical Standards.
These consultations were published alongside two further consultations, concerning a simplified capital regime for SDDTs and a second near-final policy statement on remainder of Basel 3.1 standards implementation.
All three consultations close on 12 December.