FCA is consulting on the changes it will need to make to its rules to implement CRD4. PRA will consult separately on changes to its rules and Treasury will consult on elements of CRD4 implementation that require legislative change. In principle, the CRR, as a Regulation, does not need to be implemented into UK law as it will apply automatically. FCA's paper focuses on:

  • changes relevant to its regulated community (most investment firms falling within CRD4);
  • applying a proportionate approach which does the minimum required effectively to implement CRD4, using intelligent (or even "strict") copy-out to avoid misinterpretation or gold-plating of provisions;
  • minimising change yet being forward-looking;
  • applying national discretions that CRD4 and the CRR offer and which it is within FCA's remit to address;
  • reducing burden on firms by granting general guidance on treatment of certain circumstances, rather than requiring case-by-case applications.

FCA comments that firms will need to consider all of the CRR, EBA sets of standards and guidance and FCA's rules when considering their compliance with capital standards. The consultation explains the key messages and proposals, and the effects on FCA's rules, of several significant aspects of CRD4. The bulk of rule changes will be contained in a new handbook module to be called Investment Firms Prudential Sourcebook (IFPRU). FCA asks for comments by 30 September and aims to publish a policy statement and final rules in advance of the implementation date of 1 January 2014. However, as some of its rules are subject to Treasury's approval of its use of discretion, it may need to consult further later in the year.

(Source: FCA Consults on CRD4)