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CRD IV updates

Capital Requirements Directive IV | Updates​ | 2015 updates​ 2014 and 2013 updates

May 2016

On 12 May the PRA published CP21/16 Pillar 2 liquidity. The PRA proposed a statement of policy on its approach to three aspects of Pillar 2 liquidity (‘Pillar 2’): intraday risk, debt buyback and non-margined derivatives. The CP also outlined the PRA’s Pillar 2 objectives and scope. In addition, it provided an early overview of planned future work to develop the Pillar 2 approach where the PRA is not yet setting out proposals. As such, this CP constituted the first of two planned CPs on Pillar 2.

On 10 May 2016, the PRA published a reporting clarification on the procedures for reporting ‘Own funds requirements related to Pillar II adjustments’ in the COREP CA4 template. This clarification updates the CA4 reporting clarification issued in September 2014, to reflect the changes to the Pillar 2 capital adequacy framework contained in PS17/15. These updates include the introduction of the PRA buffer, the phasing in of the CRD IV buffer, and the phasing out of the capital planning buffer.

Clarification of procedures for completion of COREP Section C 04.00 (CA4) Row 820: Own funds requirements related to Pillar II adjustments

March 2016

On 31 March the PRA published Equity release mortgages – Discussion Paper 1/16. The PRA asks for views on equity release mortgage (ERM) valuation, capital treatment, risk management and associated matters, and seeks a range of views on good practice for managing the risks introduced by investing in this asset class. While the DP is most relevant to life insurance and reinsurance companies with ERM exposure, it will also be of interest to other insurers, industry stakeholders (including, without limitation, banks, building societies, other lenders, trade bodies, brokers, credit rating agencies, consultants, actuaries and auditors) and academics. By opening the discussion to a range of stakeholders, the PRA is aiming to consolidate views from across sectors. The discussion process closes on Friday 27 May 2016.

On 11 March the PRA updated The PRA’s approach to banking supervision. The PRA’s approach to insurance supervision was also updated.

February 2016

On 19 February the PRA published Policy Statement 6/16 ‘The PRA’s approach to identifying other systemically important institutions (O-SIIs)’ which sets out feedback to responses to CP39/15 and includes the final statement of policy on the PRA’s approach to identifying O-SIIs, as is required under the Capital Requirements Directive (2013/36/EU) (CRD) as implemented in the Capital Requirements (Capital Buffers and Macro-prudential measures) Regulations 2014. The PRA will identify and publish a list of O-SIIs annually. The 2015 list of UK firms designated as O-SIIs is available below.

The PRA’s approach to identifying other systemically important institutions (O-SIIs) - PS6/16