Laura WilesThe PRA has published a consultation on PRA Rulebook Glossary definitions to replace those currently set out under the Articles 4, 4A, 4B and 5 of the Capital Requirements Regulation (CRR).
The consultation follows HM Treasury’s announcement of its approach for revoking the remaining provisions of the CRR.
The PRA proposes to restate the vast majority of the relevant definitions without changes in substance, and to expressly define certain terms in its Rulebook Glossary that are currently implicitly defined in other CRR provisions. However, there are a few areas in which the PRA aims to make targeted improvements to enhance clarity, including:
- Broadening the the definition of “SME” to align it with that of the near-final Basel 3.1 rules;
- Converting certain currency thresholds from EUR to GBP;
- Explicitly including all insurers and non-directive insurers in the definition for ‘financial sector entity’; and
- Expanding the definition for ‘one year default rate’ so that it refers to defaults of facilities as well as obligors.
The consultation closes on 30 October 2025, and the changes are proposed to become effective alongside the Basel 3.1 framework, from 1 January 2027.