What is a waiver or modification?
A 'waiver' from a rule means that the applicant does not have to comply with that rule. A 'modification' to a rule enables the applicant to comply with an amended rule that better fits their own circumstances.
We can grant a waiver or modification on application or with the consent of a person who is subject to the rules. We do not automatically grant applications for waivers or modifications: we assess the merits of individual application against the statutory tests laid out in FSMA.
Section 138A(4) of FSMA sets out the statutory tests which must be met:
- Compliance by a firm with the unmodified rules would be unduly burdensome or would not achieve the purpose for which the rules were made and
- The direction would not adversely affect the advancement of any of the PRA’s objectives.
In addition to the statutory tests, we will consider other relevant factors before a waiver or modification is granted, including whether it is compatible with European law.
In exceptional circumstances, we may decide to grant a 'general' waiver (known as a 'waiver or modification by consent').
We have a statutory duty to publish the details of waivers and modifications we approve, unless we consider it inappropriate or unnecessary to do so. Waivers and modifications are published on the Financial Services Register.
A waiver or modification will not apply retrospectively.
How to apply for a waiver or modification
Dual-regulated firms should apply to us to waive a PRA rule using the waiver/modification application form. Send it, along with supporting documentation, to PRA-Waivers@bankofengland.co.uk. Alternatively, hard copies of the application may be sent to: PRA Authorisations - Authorisations Division, Prudential Regulation Authority, 20 Moorgate London EC2R 6DA.
A dual-regulated firm seeking a waiver or modification of a Financial Conduct Authority (FCA) rule should apply direct to the FCA.
When it is not immediately clear whether a rule is PRA or FCA designated, firms should ask their supervisory contact to clarify. We can only waive or modify provisions that are designated ‘PRA’. The complete list is available in the PRA Rulebook.
Details of waivers we have given are available on the FCA’s website.
What should an application include?
We find it helpful for firms to provide the following information as part of an application for a waiver/modification:
- a list of all the entities which require the waiver/modification, including any FCA solo-regulated firms
- details of the PRA rules that the application is seeking to waive/modify
- details of the applicable precedent waiver/modification Directions found on the Financial Services Register
- detailed information about the rationale for the waiver/modification
- detailed responses with respect to the s138A statutory tests in FSMA
- 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 s138B of FSMA
- important timelines.
Common waiver applications
For certain types of applications, we have set out the format and content of the supporting documentation we expect to receive. The following notes are to assist firms on common applications and issues that arise when providing information to support their application. However, these are not intended to be exhaustive nor a guarantee that an application will be approved.
Firms seeking any of the waivers listed below should complete our standard waiver application form, and, where required, the supplementary information form specific to their application from the list below. Applications should be submitted to PRAfirstname.lastname@example.org.
Supplementary information and forms
|Entities excluded from the scope of group supervision
(Group Supervision 2.2)
|Group choice of SCR calculation method
(Group Supervision 7.1)
Group SCR or other measures for non-equivalent groups
|Non-disclosure of information in solvency and financial condition report
|Quarterly reporting exemption
(Reporting 2.2(1) and Group Supervision 17.3)
|Single group own risk and solvency assessment report
(Group Supervision 17.2)
|Single group solvency and financial condition report
(Group Supervision 18.1)
|Financial conglomerate waivers
(Financial Conglomerates 2.1)
What happens once my application is submitted?
We will acknowledge all applications we receive.
In the course of our assessment, we may ask for further information. We will consult with the FCA before we make a decision to determine whether granting the waiver or modification may have a material impact on the FCA's objectives.
There are no statutory deadlines for assessing waiver applications. Firms should submit in good time, and we will endeavour to meet a firm's request to receive a response by a particular date. However, if an application raises complex issues this may not be possible.
What happens once a decision is reached?
If we decide to grant the waiver or modification we will issue an approval letter and a Direction setting out how the rule has been waived/modified, to which entities the Direction is applicable, and the time period for which the Direction is valid. We will also set out any relevant conditions in the Direction, for example new reporting requirements.
The waiver or modification will be granted for a specific duration, after which it will cease to apply. A firm can then apply for a new waiver or modification by submitting a new application.
Failure to comply with a rule as modified, or with any condition which is attached to a waiver or modification, may incur enforcement action by the PRA and (if applicable) a right of action under s138D of FSMA (Actions for damages).
Publishing waivers and modifications
The majority of waivers and modifications are published in full. Certain waivers are published in abridged form, generally to protect the commercial interests of the firm concerned. A firm can make representations to us if it objects to the publication of the waiver. If we decide to publish a waiver or modification against the wishes of a firm, we will give the firm an opportunity to withdraw the application before the waiver is granted.
The decision to withhold a waiver, modification, or the identity of a firm from publication will usually only last for the duration of the relevant grounds for non-publication. If we decide to publish a waiver or modification which has previously been withheld, we will first give the firm an opportunity to make representations.
We will update the Financial Services Register with the firm's Direction detailing the waiver or modification.
We also published a consolidated list of waiver directions (in effect as at 1 March 2018).
Revoking a waiver or modification
We may revoke a waiver or modification at any time. In deciding whether to revoke a waiver or modification, we will consider whether the conditions in s.138A (4) of FSMA are no longer satisfied and whether the waiver or modification is otherwise no longer appropriate.
Waivers and modifications by consent
We may offer a general waiver to firms. These are referred to as ‘waivers by consent’ under section 138A of the Financial Services and Markets Act 2000 (as amended by the Financial Services Act 2012) (FSMA).
A waiver by consent may be offered in exceptional circumstances where we consider that a waiver should apply to a number of firms, for example where an unmodified rule may not meet the circumstances of a particular category of firm. In these cases we will inform the firms concerned that the waiver is available, either by contacting them individually or by publishing details of the availability of the waiver on our website.
To take advantage of any of the waivers by consent listed below, a firm must email PRA-Waivers@bankofengland.co.uk, or write to the PRA Authorisations Team at the following address, stating its agreement to comply with any conditions included within the Waiver Direction: PRA Authorisations - Authorisations Division, Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA.
Available waivers and modifications by consent
The following waivers and modifications by consent are available:
Modification by consent of Fitness and Propriety 2.7
|Modification by consent of Fitness and Propriety 2.7||Download PDF|
|Direction for modification by consent of Fitness and Propriety 2.7||Download PDF|
|Modification by consent of SUP 16.12.5R (Note 5), SUP 16.12.11BR (Note 3), SUP 16.12.15BR (Note 3), SUP 16.12.22CR (Note 3) and SUP 16.12.25CR (Note 3) (Available to firms with an internal model approach (IMA) permission.)||Download PDF|
|Direction for modification by consent of SUP||Download PDF|
PRA Rulebook non-Solvency II firms: senior insurance management functions
|Modification by consent of non-Solvency II Firms - senior insurance management functions 1.1 & 1.2
Available to insurance undertakings authorised by the PRA, that we have identified as 'dormant insolvents'.
PRA Rulebook CRR firms: leverage ratio, public disclosure and reporting leverage ratio
|Variation to previous modifications by consent to leverage ratio rule 1.2, public disclosure rule 1.1 and reporting leverage ratio rule 1.2
(Available to any firm that was granted the original rule modifications, which includes all firms currently subject to the UK leverage regime.)
|Direction for variation to previous modifications by consent to leverage ratio rule 1.2, public disclosure rule 1.1 and reporting leverage ratio rule 1.2||Download PDF|
|The original modification by consent is also available for reference.||Download PDF|
Waiver by consent: continuity of access rules
|Waiver by consent of continuity of access rules||Download PDF|
|Direction for waiver by consent of continuity of access rules||Download PDF|
PRA Rulebook Solvency II firms: reporting rules for National Specific Templates (NST)
|Modification by consent of Solvency II reporting rules for National Specific Templates
(Available to Solvency II firms that have a financial year ending on or after 30 June 2016 and before 19 December 2016.)
|Direction for modification by consent of PRA Rulebook Solvency II transitional measures 3.1.||Download PDF|
Modification by consent: final reporting rules in PS18/17
|Modification by consent of final reporting rules in PS18/17||Download PDF|
|Direction for modification by consent of final reporting rules in PS18/17||Download PDF|
Modification by consent: regulatory reporting rules
|Modification by consent of regulatory reporting rules||Download PDF|
|Direction for modification by consent of regulatory reporting rules||Download PDF|
Modification by consent: PRA Rulebook Capital Buffers
Direction for modification by consent of 5.1 to 5.5 of the Capital Buffers Part of the PRA Rulebook
(This should be read and used in conjunction with the Voluntary Requirement – Capital Buffers and Pillar 2A Model Requirements. See also the note below.)
Note: Voluntary Requirement – Capital Buffers and Pillar 2
As stated in Supervisory Statement 31/15 ‘The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)’ (and as amended with effect from 1 January 2018 pursuant to Policy Statement 30/17 ‘Pillar 2A capital requirements and disclosure’), firms to which the CRR applies will be invited to apply for a voluntary requirement (VREQ) under section 55M of the Financial Services and Market Act 2000 preventing them from meeting their CRD IV combined buffer with any Common Equity Tier 1 capital maintained to meet their Total Capital Requirement.
The PRA will write to firms setting out its view of the amount and quality of Pillar 2A capital they should hold based on the ICAAP and the SREP, and include a VREQ application form. If firms agree, the PRA expects that they will apply for the imposition of the requirements set out in the updated Voluntary Requirement – Capital Buffers and Pillar 2A Model Requirements by signing and returning the VREQ application form.
As part of the VREQ application process, from 1 January 2018 firms are expected to also apply for a minor modification of 5.1 to 5.5. of the Capital Buffers Part of the PRA Rulebook. This is to avoid any confusion, given that Pillar 2A is a formal requirement, in the application of Maximum Distributable Amount trigger points under the rules (which do not include a Pillar 2A component) and as set by the VREQ (which do). The updated VREQ application incorporates a link to a pro forma modification by consent direction, and is set out in the above table under ‘Voluntary Requirement - Capital Buffers and Pillar 2’.
|Voluntary Requirement – Capital Buffers and Pillar 2A Model Requirements||Download PDF|