PRA has amended its pre-issuance notification (PIN) regime applicable to CRR firms and insurers. It has published the new rules with appropriate forms. The changes will apply from 1 March. Key elements of the regime mean that:

  • CRR firms must now provide PRA with at least one month’s notice prior to issuing a common equity tier 1 instrument;
  • CRR firms issuing CET1 instruments should complete a CET1 Compliance Template in lieu of providing a legal opinion regarding applicable quality of capital requirements;
  • there is an advance notification exemption for certain capital instruments issued on substantively similar terms to prior issued instruments;
  • insurers must submit legal opinions regarding the compliance of proposed capital instruments, other than ordinary share capital, with applicable quality of capital requirements as part of the PIN process;
  • insurers must also provide PRA with at least one month’s notice prior to amending capital instruments, and may only make use of the advance notification exemption for drawdowns from note issuance programmes (NIPs) if certain conditions are satisfied; and
  • CRR firms and insurers must submit to PRA accounting opinions (in draft form prior to issuance and in final form at the time of issuance) when issuing Additional Tier 1 (AT1) capital instruments (CRR firms) or Restricted Tier 1 (RT1) capital instruments (Solvency 2 firms) regarding the proposed capital instruments’ accounting treatment.

(Source: PRA Amends PIN Regime)