We have the power to exercise various discretions on firms’ capital requirements, which are available to us under the Capital Requirements Regulations (CRR). We assess applications on a case-by-case basis against the relevant CRR article or reference and, where applicable, PRA rules and supervisory statements. We will also take into account our statutory duty to promote the safety and soundness of firms.
Dual regulated firms (firms regulated by both the PRA and the FCA) must apply to the PRA for capital requirements permissions. Application fees are only required for CRR model permissions. These are set out in the Fees Part of the PRA Rulebook.
Firms should submit their application in good time, and we will try to meet request to respond by a particular date. However, this may not be possible if an application raises complex issues. We acknowledge all applications that we receive.
What should a CRR permissions application include?
We find it helpful for firms to provide the following information as part of an application for a CRR permission:
- a list of all the entities which require the CRR permission, including any Financial Conduct Authority (FCA) solo-regulated firms
- details of the CRR article under which the application is being made
- detailed information about the rationale for the CRR permission, including, for example, whether it is part of a wider group transaction/restructure
- detailed responses with respect to the CRR article conditions and relevant Regulatory Technical Standards (RTS) or Implementing Technical Standards (ITS)
- confirmation that the firm is content for the waiver/modification to be published on the Financial Services Register if approved and, if not, an explanation of why it would be inappropriate to do so, addressing the requirements set out in HMT Regulation 43
- important timelines.
Application forms and notes
Send your completed application form, together with any supporting documentation required, to PRAemail@example.com.
Alternatively, hard copies can be sent to PRA Authorisations, Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA.
We have set out the format and content of the supporting documentation we expect to receive for certain types of CRR permissions application in the documents below:
|Intragroup exposures applications: CRR Articles 113(6), 400(2)(c), 400(2)(g)-(h) and the leverage ratio Delegated Act Article 429(7)|
|Individual consolidation under CRR Article 9
|Delta calculation, applications of standardised approach: CRR Articles 329, 352(1) and 358
|Inclusion of interim or year-end profits in Common Equity Tier 1 capital under Article 26(2)
|Application to classify a new instrument as Common Equity Tier 1 (CET1): CRR Article 26(3)||Download PDF|
|Liquidity sub-groups under CRR Article 8
|Interest rate on derivative instruments: CRR Article 331
|Calculation of the overall net foreign exchange position: CRR Article 352(2)
|Internal ratings-based approach CRR permission application pack
|Own estimates for volatility adjustments: CRR Article 225
Model change notifications
Where CRR permissions have been granted for the internal ratings based (IRB) approach, the internal model method (IMM) or the internal model approach (IMA), we expect firms notifying us of changes to such approaches to complete the following pro-forma:
What happens once a decision is reached?
If we decide to grant a CRR permission, we will issue an approval letter and a written notice setting out the permission, which entities it applies to and the time period for which it is valid.
In some cases, the approval of a CRR permission may mean we need to impose or vary a firm’s requirements under section 55M of the Financial Services and Markets Act (FSMA). We will consult the FCA before we do this. These requirements will be set out in the written notice.
Published CRR permissions
We have a statutory duty to publish details of CRR permissions we approve, unless we consider it inappropriate or unnecessary to do so.
The majority of CRR permissions are published in full. Certain permissions are published in abridged form at the affected firm’s request.
We will also update the Financial Services Register with the firm’s written notice of being granted the CRR permission.