Capital Requirements Directive IV

Capital Requirements Directive IV (CRD IV) is an EU legislative package covering prudential rules for banks, building societies and investment firms.

Background

The EU text was formally published in the Official Journal of the EU on 27 June 2013 (note that the Regulation has also been subject to a subsequent corrigendum). The bulk of the rules contained in the legislation are applicable from 1 January 2014.

CRD IV is made up of the:

CRD IV is intended to implement the Basel III agreement in the EU. This includes enhanced requirements for:

  • the quality and quantity of capital
  • a basis for new liquidity and leverage requirements
  • new rules for counterparty risk
  • new macroprudential standards including a countercyclical capital buffer and capital buffers for systemically important institutions. 

CRD IV also makes changes to rules on corporate governance, including remuneration, and introduces standardised EU regulatory reporting - referred to as COREP and FINREP. These reporting requirements will specify the information firms must report to supervisors in areas such as own funds, large exposures and financial information.

CRD IV reporting requirements

The European Banking Authority (EBA) will specify all reporting data required from firms and National Supervisory Authorities (NSAs) via COREP and FINREP. This will continue to be collected via the Financial Conduct Authority’s (FCA) GABRIEL system. In the UK the sole reporting format for this data will be via XBRL. This will cover all data currently included within the EBA Implementing Technical Standards (ITS). The FCA is responsible for making the required changes to enable GABRIEL to accept XBRL.

Please see The National Archives for any material not available.

The National Archives

  • 2017 updates

    November 2017

    On Thursday 30 November we published the 2017 list of UK firms designated as other systemically important institutions (O-SIIs), as required under the Capital Requirements Directive (2013/36/EU) (CRD) as implemented in the Capital Requirements (Capital Buffers and Macro-prudential measures) Regulations 2014. We are required to identify O-SIIs on an annual basis.

    PDF2017 list of UK firms designated as O-SIIs

    April 2017

    On Wednesday 18 January the European Banking Authority (EBA) published an update to the XBRL taxonomy that Competent Authorities should use for the remittance of data under the EBA Implementing Technical Standards (ITS) on supervisory reporting. Reports with reference dates as of 30 June 2017 onwards are to use the new taxonomy set (2.6), which is related to the January 2017 framework release. On 28 April we confirmed that, if daily liquidity reporting, as set out in PRA Supervisory Statement 24/15 'The PRA’s approach to supervising liquidity and funding risks', is expected between 1 June 2017 to 30 June 2017 inclusive, collection will be against Data Point Model (DPM)Taxonomy 2.6. Firms will be notified via the GABRIEL collection system if they are required to submit daily reports, which is effective from the following day. Firms should refer to the EBA’s website for further information on Taxonomy 2.6.

    February 2017

    On Friday 17 February we published updated notes to help firms complete intraday liquidity returns. The updates address common errors and inconsistencies found in the submissions of intraday liquidity reporting and supersede previous individual guidance. We ask firms to have regard to the updated notes on the template going forward, including as the basis for their upcoming quarterly returns in March.

    PDF Intraday liquidity monitoring reporting

     

  • 2016 updates

    December 2016

    On Wednesday 7 December in accordance with Article 131 of the Capital Requirements Directive (2013/36/EU) (CRD), we disclosed the 2016 list of UK headquartered Global Systemically Important Institutions (G-SIIs). We also disclosed their respective sub-categories, applicable scores and G-SII buffers.

    The 2016 UK G-SIIs and their sub-category allocations are as follows:

    G-SII Sub-category Score G-SII buffer rate
    HSBC Holdings Plc 3 416  2%
    Barclays Plc 2 308 1.5%
    The Royal Bank of Scotland Group Plc 1 154 1%
    Standard Chartered Plc 1 133

    1%

     

    These buffers will apply from 1 January 2018, subject to phase-in arrangements outlined in Article 162(5) of the CRD. The list of G-SIIs and their sub-category allocations will be updated annually. 

    On Tuesday 6 December, we issued clarification on IFRS 9 for 2017 Internal Capital Adequacy Assessment Process (ICAAP) stress testing and capital planning on the 2016 stress test scenario webpage. [LINK]

    This clarification sets out information on how firms should incorporate IFRS 9 into stress testing and capital planning carried out as part of their ICAAP obligations in 2017. This is only applicable:

    • to firms that apply International Financial Reporting Standards (IFRS) and so is not applicable to firms that apply UK GAAP; and
    • for ICAAPs based on accounts as at 31 December 2016 or a later date before 31 December 2017.

    This clarification sets out how firms should incorporate future changes to the accounting standards (IFRS 9) into their stress testing and capital planning as part of their ICAAP for 2017. From 1 January 2018, IFRS 9 will introduce a forward-looking expected credit loss model for loans, replacing the current 'incurred loss' model. The clarification aims to encourage firms applying IFRS to have at a minimum certain forecast numbers for 2018 onwards on an IFRS 9 basis, to reinforce the need to be prepared for the new accounting standard, and to help the firms and PRA size and plan for the impact of IFRS 9.

    November 2016

    On Tuesday 29 November we published the 2016 list of UK firms designated as other systemically important institutions (O-SIIs), as required under the Capital Requirements Directive (2013/36/EU) (CRD) as implemented in the Capital Requirements (Capital Buffers and Macro-prudential measures) Regulations 2014. We are required to identify O-SIIs on an annual basis.

    PDF 2016 list of UK firms designated as other systemically important institutions (O-SIIs)

    October 2016

    On Thursday 20 October, we published a statement on our interpretation of the concept of 'durable link' in the Capital Requirements Regulation (575/2013).

    PDF PRA statement on the concept of 'durable link'

    On Tuesday 18 October, we published a statement on feedback received during the consultation period for CP21/16 ‘Pillar 2 liquidity’.

    PDF PRA statement on feedback received during the consultation period for CP21/16 'Pillar 2 liquidity'

    On Monday 17 October, the FCA issued a note on its website that Taxonomy 2.4.1.1 is available on GABRIEL for reporting period end dates on or after 30 September 2016.

    August 2016

    On Friday 12 August, we published a letter reminding all CRR firms that they are required to comply with our rules to put in place a policy promoting diversity on the management body. The letter includes links to the General Organisational Requirements chapter of the PRA Rulebook, and the ‘EBA report on the benchmarking of diversity practices’ published in July.

    PDF PRA rules on diversity within firms' management body

    July 2016

    On Monday 4 July, we published a letter from supervisors to firms with the title 'Additional liquidity monitoring metrics (ALMM) - New data item'.

    PDF Additional liquidity monitoring metrics (ALMM) - New data item

    May 2016

    On 10 May 2016, we 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.

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

    February 2016

    On 19 February we 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 our 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. We will identify and publish a list of O-SIIs annually. The 2015 list of UK firms designated as O-SIIs is available below.

    PDF 2015 list of UK firms designated as other systemically important institutions (O-SIIs)

     

  • 2015 updates

    December 2015

    On 18 December we published updated notes (initially published on 28 August and updated on 30 October) to help firms complete interim LCR returns. The updates address common errors found in the first submission of interim LCR returns. The updated notes are available below with new text is underlined and deleted text is struck through.

    PDF Interim LCR reporting notes

    On 15 December in accordance with Article 131 of the Capital Requirements Directive (2013/36/EU) (CRD), we disclosed the 2015 list of UK headquartered Global Systemically Important Institutions (G-SIIs) and their respective sub-categories. The PRA also disclosed the applicable scores and G-SII buffers.
    The 2015 UK G-SIIs and their sub-category allocations are as follows:

    G-SII

    On the basis of the consolidated situation

    Sub-category  Score

    Corresponding

    G-SII buffer rate

     HSBC Holdings Plc  4 439 2.5%
     Barclays Plc 3 349 2%
    Royal Bank of Scotland Group Plc 1 213 1%
    Standard Chartered Plc 1 142 1%

    These buffers will be applied and phased in from 1 January 2017 in line with Article 162(5) of the CRD. The list of G-SIIs and their sub-category allocations will be updated annually.

    November 2015

    On 30 November we confirmed that FINREP will be scheduled in the same way as other group reporting submitted via the GABRIEL system. This means that it will be scheduled to all firms in the group to which the reporting obligation applies. One firm will submit the templates, which will satisfy the reporting obligation on behalf of the rest. It is essential, therefore, that firms include the Firm Reference Numbers (FRNs) of all firms in the group when making their submission.

    On 6 November the FCA published information about upcoming changes to regulatory data filing rules on its website. CRD IV firms should note that they need to comply with these rules from 28 November when submitting data via GABRIEL.

    On 9 November we published our response sent on 7 October to the European Commission consultation on the possible impact of the CRR and CRD IV on bank financing of the economy. As a follow up, the European Commission will organise a conference later this year, paving the way for the European Commission's final report in 2016. All responses submitted to the consultation are available on the European Commission website.

    PDF Bank of England's response to European Commission consultation on the possible impact of the CRR and CRD IV on bank financing of the economy

    PDF Annex 1: Charts on lending

    PDF Annex 2: The case for a more proportionate regulatory regime

    As stated in Supervisory Statement 31/15, firms to which 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 Individual Capital Guidance from 1 January 2016. The CRD IV combined buffer includes a buffer for global systemically important institutions (G-SIIs). In Supervisory Statement 6/14 we explained that the G-SII buffer would be set by the PRA using its powers under section 55M. On 9 November 2015 we confirmed we will therefore send VREQ application forms to affected firms which they are expected to sign and return. G-SIIs should read these application forms in conjunction with the requirements set out in ‘Capital Buffers and Pillar 2 Model Requirements for G-SIIs’ available below.

    PDFCapital Buffers and Pillar 2 Model Requirements for G-SIIs

    October 2015

    On 7 October the FCA issued communications to firms on some changes and important information regarding CRD IV submissions to GABRIEL. The communications cover filing rules, use of Legal Entity Identifier (LEI), validation rules, negative filing indicators and inappropriate zero values. Submissions that fail any of the criteria or checks in GABRIEL will be rejected. Firms are referred to our communication of October 2014 that set out the EBA’s recommendation to obtain a Legal Entity Identifier, available in the National Archives.

    September 2015

    As stated in Supervisory Statement 31/15, firms to which 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 Individual Capital Guidance from 1 January 2016.  On 18 September 2015 we confirmed we will therefore send VREQ application forms to firms which they are expected to sign and return. These application forms should be read in conjunction with the requirements set out in ‘Capital Buffers and Pillar 2 Model Requirements’, available below. This document is not relevant for the UK headquartered Global Systemically Important Institutions.

    PDFCapital Buffers and Pillar 2 Model Requirements

    On 14 September we published reporting clarifications on common reporting errors found in the COREP COR002 Large Exposures templates and in the COR001 CA4 template for reporting eligible capital for purposes of large exposures. Reporters are asked to ensure that these clarifications are applied for reporting from 2015 Q3.

    PDF Common Reporting Errors found in COR002 Large Exposures Templates and reporting of Eligible Capital for purposes of Large Exposures within COR001

    August 2015

    Following the publication of Supervisory Statement 29/15 on 20 July 2015, on 28 August we made available notes and applicable Excel and XSD templates to facilitate interim LCR reporting from 1 October 2015. The notes and Excel templates are available below; firms wishing to use the XSD templates should get in touch with their usual supervisory contact.

    PDF Interim LCR reporting notes

    Excel Interim LCR template

    Excel Simplified LCR template

    On 28 August we confirmed our arrangements for those UK banks, building societies and designated investment firms contacted by their supervisor to report intraday liquidity data metrics, on a voluntary basis, starting from reference period 1 July 2015 to 30 September 2015.

    We have prepared the notes and relevant Excel and XSD templates which firms are asked to complete, with first reporting to be submitted by 15 October 2015. This update is intended to help firms incorporate the arrangements into their planning for intraday liquidity reporting. We intend to stop collecting the data when intraday liquidity reporting is fully harmonised in the EU. Firms should contact their line supervisor with any queries in the first instance. The notes and Excel templates are available below; firms wishing to use the XSD templates should get in touch with their usual supervisory contact.

    Interim intraday reporting notes

    Excel Interim intraday liquidity – direct participants template

    Excel Interim intraday liquidity – indirect participants template

    Excel Simplified interim intraday template

    On 25 August we confirmed that firms which would have been expected to submit data for the first time on 1 September should ignore the notifications for the submission of additional monitoring metrics for liquidity on the GABRIEL schedule until the European Commission announces the implementation date via the Official EU Journal.

    The European Commission has announced that it intends to adopt the draft Implementing Technical Standards (ITS) with regard to additional monitoring metrics for liquidity reporting with an amended application date of 1 January 2016. This replaces 1 July 2015.

    The Commission intends to delete the ‘maturity ladder’ template from the ITS at this stage. The EBA will now need to send its opinion or a revised ITS. We will update firms when the EBA response is known.

    Firms will not be required to report any of the data in the additional monitoring metrics for liquidity until the first reporting and submission dates following the amended application date. We will consider what action to take in respect of GABRIEL notifications for firms which would have been expected to submit data for the first time on 1 September.

    July 2015

    On 29 July we issued two updates for firms affected by CRD IV.

    1. EBA update on the status of its final draft technical standards on additional liquidity monitoring metrics (ALMM). The European Banking Authority (EBA), following requests from stakeholders, published on 17 July 2015 an update on the application date of its final draft Implementing Technical Standards (ITS) on additional liquidity monitoring metrics.

    The EBA had originally submitted its final draft ITS on additional liquidity monitoring metrics to the European Commission in December 2013, with a proposed application date of 1 July 2015. Considering that the European Commission has not yet adopted the final draft ITS, it is highly likely that the application date, which will be specified once the ITS are published in the EU Official Journal, will be postponed by at least three months. The final application date will depend on the timeline of adoption of the ITS by the European Commission.

    EBA update on the status of its final draft technical standards on ALMM

    2. Update on interim LCR and interim intraday reporting. We are finalising the notes and accompanying Excel and XSD templates for firms to be able to make their first submission for interim LCR and/or interim intraday reporting. These will be published by the end of August.

    June 2015

    On 29 June we confirmed that firms are required to comply with EBA Guidelines on materiality, proprietary and confidentiality on disclosure frequency from 15 October 2015. The EBA’s Guidelines on materiality, proprietary and confidentiality and on disclosure frequency were finalised and published in all EU official languages on 15 April 2015.  They are addressed to all firms that are subject to the Capital Requirements Regulation EU No 575/2013.  The Guidelines promote market transparency by setting out a consistent framework for firms’ assessments of the frequency of disclosures and how firms should apply the concepts of materiality, proprietary and confidentiality when assessing the use of any waiver of disclosure requirements.

    The EBA asks national competent authorities to implement the Guidelines by incorporating them in their supervisory procedures within six months after their publication in all EU official languages (ie 15 October 2015) and to ensure that firms fully comply with the Guidelines for all transactions entered into thereafter.  We have notified the EBA of its intention to comply and intends to incorporate the Guidelines into its supervisory procedures by, but not before, 15 October 2015.  We expect firms to adjust their disclosure policies accordingly to comply fully with the Guidelines for all transactions entered into from 15 October 2015. The Guidelines can be found on the EBA's website.

    April 2015

    On 7 April we published a note setting out the basis under which it will accept regulatory returns during the transitional period for first-time adopters of FRS 102 that are currently applying old UK GAAP (meaning pre-FRS 102 UK GAAP). As the UK accounting standards offer a choice of accounting frameworks that include IFRS, equivalent principles should apply to first-time adopters of IFRS that are currently applying old UK GAAP.

    PDF Basis of preparation of regulatory returns for first-time adopters of FRS 102 or IFRS during the transition period for FRS 102

    February 2015

    On 27 February in accordance with Article 131 of the Capital Requirements Directive (Directive 2013/36/EU), we disclosed the 2014 list of UK headquartered Global Systemically Important Institutions (G-SIIs) and their respective subcategories. We also disclosed the applicable scores and G-SII buffers. These are:

    G-SII

    Sub-category Score

    Corresponding

    G-SII buffer rate

    HSBC 4 477 2.5%
    Barclays 3 384 2%
    Royal Bank of Scotland 2 238 1.5%
    Standard Chartered 1 133 1%

    These buffers will be phased in from 1 January 2016, coming into full force by 1 January 2019 in line with the CRD. The list of G-SIIs will be updated annually.

    On 13 February we confirmed that an administrative fee of £250 will be levied to firms that are late reporting a regulatory return. SUP 16.3.14R will continue to be postponed for late CRD IV returns (COREP and FINREP), pending a public consultation by the PRA on the rule (currently expected in April 2015). Retained FSA Handbook items and remuneration returns are unaffected by this change; a fee will be levied if these returns are late. We will continue to take into account the quality and timeliness of firms’ CRD IV regulatory returns when assessing their risk management and controls. We may require firms to take mitigating actions, or increase capital and liquidity add-ons for firms submitting poor quality data. More information on regulatory returns is available on Regulatory Reporting.

This page was last updated 01 December 2017
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