Update 14 November 2018This SS was updated following publication of Policy Statement 28/18 ‘UK leverage ratio: Applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer’ (see Annex for details).
Update 14 November 2018 - Leverage Voluntary Requirements (VREQ) applications for G-SIIs and institutions subject to a SRB (effective from 1 January 2019)
The PRA published the ‘Additional Leverage Ratio Buffer Model Requirements’, which replaces the previous ‘Additional Leverage Ratio Buffer Model Requirements for G-SIIs’ from 1 January 2019. As stated in the updated Supervisory Statement 45/15, global systemically important institutions (G-SIIs) and firms subject to a systemic risk buffer (SRB) to which the UK leverage ratio framework applies will be invited to apply for a voluntary requirement (VREQ) under section 55M of the Financial Services and Market Act (2000). The VREQ would include an Additional Leverage Ratio Buffer (ALRB) based on either the G-SII buffer or SRB as applicable and the associated reporting and disclosure requirements. If a firm does not hold, or is not likely to hold, an amount and quality of Common Equity Tier 1 (CET1) capital that is equal to or greater than the ALRB, the firm to which the VREQ applies will be required to notify the PRA immediately and prepare a capital plan and submit it to the PRA. The PRA will soon be sending VREQ application forms to UK G-SIIs and UK institutions subject to a SRB which they are expected to sign and return. These firms should read their application form in conjunction with the requirements set out in the document below.