PS17/21 | CP5/21 – Implementation of Basel standards

Policy Statement 17/21 | Consultation Paper 5/21

Update 14 October 2021: The policy published as near-final in PS17/21 has now been confirmed as final in PS22/21 ‘Implementation of Basel standards: Final rules’. Please see PS22/21 for further information and links to the final policy material.

Published on 9 July 2021

PS17/21 – Implementation of Basel standards

Overview

This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 5/21 ‘Implementation of Basel standards’ (page 2 of 2). It also contains near-final rule instruments, Statements of Policy (SoP), Supervisory Statements (SS), and reporting templates and instructions (see list of appendices below). 

This PS is relevant to UK banks, building societies, and PRA-designated investment firms, as well as UK financial holding companies and UK mixed financial holding companies of certain PRA-authorised firms. 

Summary of responses

The PRA received 20 written responses to CP5/21, in addition to comments received in a number of meetings with interested stakeholders. Respondents generally welcomed the PRA’s proposals to implement the remaining parts of the Basel III standards. However, respondents also sought additional clarification on the PRA’s general approach, provided general comments on the proposals, and raised concerns over the nature and impact of certain proposals, as discussed in the PS. Most responses focused in particular on the PRA’s proposals on the definition of capital, the NSFR, and SA-CCR.  

Implementation

The policy material in this PS is published as near-final. The PRA does not intend to change the policy or make significant alterations to the text of the instruments before the making of the final policy material. 

The PRA expects to publish the final rule instruments in a subsequent PS, after HM Treasury has laid the Statutory Instrument (SI), to delete the relevant parts of the CRR that these near-final rules will replace. 

This policy is intended to take effect at the same time as HM Treasury’s revocation of the relevant parts of the CRR, which will be on Saturday 1 January 2022.  

Aspects of the near-final rules are linked to existing publications, such as Discussion Paper (DP) DP1/21 ‘A strong and simple prudential framework for non-systemic banks and building societies’, the leverage ratio, and forthcoming PRA consultations, such as Basel 3.1. For further information on these aspects, please refer to the Regulatory Initiatives Grid.

Policy Statement 17/21

Appendices

Appendix 1: Near-final CRR RULES INSTRUMENT 2021
Appendix 2: Near-final PRA RULEBOOK: CRR FIRMS: (CRR 2 REVOCATIONS AND OTHER AMENDMENTS) INSTRUMENT 2021
Appendices 3-11 and 18: Supervisory Statements and Statements of Policy - please see PS17/21 (page 81)
Appendix 12: Detailed analysis of objectives and have regards
Appendix 13: Summary of the purpose of the rules
Appendix 14: Corresponding provisions
Appendix 15: Restatement provisions
Appendix 16-17: Reporting and disclosure templates and instructions - please see PS17/21 (page 82)

Published on 12 February 2021

CP5/21 - Implementation of Basel standards

Overview

This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA’s) proposed rules in respect of the implementation of international standards through a new PRA Capital Requirements Regulation (CRR) rule instrument.

The purpose of these rules is to implement part of the set of international standards that remain to be implemented in the UK. This CP also sets out the proposed new PRA CRR rules in full, including parts of the onshored CRR that are not changing but rather are being transferred into PRA rules (although, where these do not change, they do not form part of this consultation).

This consultation is relevant to banks, building societies, PRA-designated investment firms, and PRA-approved or -designated financial or mixed financial holding companies (firms).

Implementation

The PRA’s proposed approach would enable these Basel III standards to be implemented by firms from Saturday 1 January 2022; provide sufficient time for firms to embed the related supervisory reporting; and build on the progress firms have already made towards implementation.

Responses and next steps

This consultation closes on Monday 3 May 2021. The PRA invites feedback on the proposals set out in this consultation, including on the questions at the end of Chapters 3, 6, 8, 12 and 14. The PRA would also welcome firms’ views on whether additional and material costs or impacts not identified in Chapter 17 may arise as a result of the proposals. Please address any comments or enquiries to cp5_21@bankofengland.co.uk.

Consultation Paper 5/21

Appendices

Appendix 13: Draft updated templates and instructions (see links below) 

PRA data items

RFB data items

UK COREP and FINREP data items

UK COREP and FINREP instructions

UK Pillar 3 disclosure data items

UK Pillar 3 disclosure instructions

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