PRA is consulting on its plans to implement the Fourth Capital Requirements Directive (CRD4) into its rules. Like FCA (see FReD 2 August) it notes that much of the framework contained in the CRR will apply directly, and that Treasury is responsible for other aspects of implementation. The consultation covers:

  • PRA's use of discretions and derogations under CRR;
  • the transitional provisions in the CRD4 package;
  • how it plans generally to use its powers as a competent authority under CRD4;
  • issues already being addressed by other initiatives, such as recovery and resolution plans;
  • the role of the EBA technical standards, guidelines and Q&As;
  • the need for further work on new processes that CRD4 implementation will introduce into PRA's regulatory operations; and
  • coordination with other regulators. 

PRA plans to make the changes by a number of instruments. Some will form a suite under the heading "PRA Rulebook - CRR Firms" and others will amend existing parts of the rulebook. The instruments will comprise:

  • the Capital Buffers Instrument;
  • the Internal Capital Adequacy Assessment Instrument;
  • the CRD (Governance and Remuneration) Amendment Instrument (amending the Glossary and the Senior Management Arrangements, Systems and Controls Sourcebook (SYSC));
  • the CRD (Passporting) Amendment Instrument amending the Supervision Manual (SUP);
  • the Definition of Capital Instrument;
  • the Benchmarking of Internal Approaches and the Credit Risk Instrument;
  • the Counterparty Credit Risk Instrument;
  • the Market Risk Instrument;
  • the Groups Instrument;
  • the Large Exposures Instrument;
  • the Banks, Building Societies and Investment Firms (BIPRU) (Liquidity Standards) Amendment Instrument;
  • the CRD (Reporting) Amendment Instrument which will amend the SUP;
  • the Public Disclosure Instrument;
  • the Waivers Transitional Provisions Instrument;
  • the Glossary Instrument;
  • the Interpretation Instrument; and
  • the CRD (Disapplication) Instrument amending the General Provisions Sourcebook (GENPRU) and BIPRU.

This will have the effect of disapplying almost all of GENPRU and BIPRU to CRD firms regulated by PRA.

It also proposes supervisory statements covering Pillar 2, Definition of Capital, Credit Risk, Counterparty Credit Risk, Market Risk, Operational Risk, and Groups and Large Exposures.

The consultation also addresses other practical measures, such as the treatment of existing waivers, and PRA's plans to grandfather over certain waivers currently in force under BIPRU and GENPRU rules which will no longer apply.

PRA needs comments by 2 October so it can make its rules in time. (Source: PRA Consults on CRD4)