On November 28, 2014, the UK Prudential Regulation Authority (“PRA”) launched a consultation on the UK liquidity coverage requirement (“LCR”) framework. EU secondary legislation implementing LCR requirements across the EU will come into force by December 31, 2014 and will apply in the UK from October 1, 2015. The PRA is therefore proposing to: (i) revoke the current UK LCR rules; (ii) apply a transition to 100% LCR on January 1, 2018 by requiring 80% LCR from October 1, 2015 and 90% from January 1, 2017; (iii) continue existing add-ons not covered in the EU LCR regime as new Pillar 2 add-ons until each firm’s next liquidity review; (iv) maintain the current reporting regime for two years following the introduction of the COREP liquidity returns in 2015; (v) require firms to ensure that their systems and processes enable them to report all COREP liquidity returns daily; (vi) extend the EU LCR rules to UK-designated investment firms; and (vii) require third country firms to provide liquidity information on a whole-firm basis. The proposals are relvant to UK banks, building societies and UK-designated investment firms as well as UK branches of EEA credit institutions and third country banks or designated investment firms. The consultation closes on February 27, 2015.
The consultation paper is available at: