On January 13, 2015, HM Treasury published the Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) Regulations 2015 (“the Amending Regulations”) together with an explanatory memorandum. The Regulations amend the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014, which implemented all of the capital buffers under CRD IV except for the Systemic Risk Buffer (“SRB”) and the Other Sysemically Important Institutions buffer. The Amending Regulations introduce the SRB for banks and investment firms. Capital buffers require firms to hold additional amounts of capital on top of their minimum capital requirements. Under CRD IV, member states are able to decide which firms should meet the SRB and must notify the European Commission, European Systemic Risk Board, European Banking Authority and national regulators of the reasons for use of the SRB. The SRB would apply to banks and building societies with deposits of more than £25 billion (i.e. it will apply to ring-fenced banks under the bank structural reform requirements), The Financial Policy Committee of the Bank of England (“BoE”) will be responsible for setting the SRB and the PRA will apply the SRB on an entity-by-entity basis. The SRB is applicable from January 1, 2019.
The Regulations are available at: http://www.legislation.gov.uk/uksi/2015/19/pdfs/uksi_20150019_en.pdf and the explanatory memorandum is available at: http://www.legislation.gov.uk/uksi/2015/19/pdfs/uksiem_20150019_en.pdf.