Regulatory capital instruments: update to Pre-Issuance Notification (PIN) requirements

Consultation Paper 20/19
Published on 09 September 2019


In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposals for amendments to the Pre-Issuance Notification (PIN) regime applicable to PRA-authorised Capital Requirements Regulation (575/2013) (CRR) firms. Appendix 1 contains the proposed amendments to the PIN regime as set out in the Definition of Capital Part of the PRA Rulebook.

The PRA’s PIN rules are intended to enhance and maintain the quality of firms’ capital resources by providing the PRA with the opportunity to comment on the terms and conditions of proposed capital instruments prior to the issuance of such instruments. The proposals in this CP reflect the adoption of amendments to Part Two of CRR via CRR II and make improvements identified through the PRA’s experience of assessing the quality of capital instruments. The PRA considers that the proposed improvements would make the PIN regime more risk-sensitive and proportionate, and would allow firms greater flexibility in issuing capital instruments. 

CRR II amends various aspects of the CRR, including Article 26(3) which now allows a firm to classify subsequent issuances of an approved Common Equity Tier 1 (CET1) instrument as CET1, subject to meeting certain conditions including notification to the PRA (see paragraph 3.12 of this CP). As a result of these amendments, there is an overlap between the PRA’s rules in Chapter 7 of the Definition of Capital Part and Article 26(3) of the CRR as amended. On Monday 10 June 2019, the PRA made available a modification by consent as an interim solution to address this overlap ahead of formally consulting on rule changes. The PRA now proposes to amend the Rulebook to address this overlap. 

The PRA also sets out a number of proposals to make the PIN regime for CRR firms more risk-sensitive and proportionate, and to allow firms greater flexibility in issuing capital instruments. For example, the PRA proposes to amend the Rulebook to strengthen the governance of CET1 issuance, align the requirements for subsequent issuances of Additional Tier 1 (AT1) instruments to those for subsequent issuances of CET1 instruments, and remove the requirement to make a pre-issuance notification of Tier 2 (T2) instruments. The proposed restructure of Chapter 7 of the Definition of Capital Part is intended to ease understanding of the rules.

The PRA’s Supervisory Statement (SS) 7/13 ‘CRD IV and capital’ sets out the PRA’s expectations of CRR firms in relation to their quality of capital resources. The PRA proposes to update SS7/13 to emphasise the PRA’s preference for simpler CET1 capital structures and set out its proposed expectations of firms’ senior management in relation to the quality of capital resources. The PRA also proposes to clarify two terms introduced by CRR II, to ensure common understanding of notification requirements in relation to subsequent issuances of CET1 and AT1 capital instruments. Appendix 2 contains the proposed revisions to SS7/13 which is proposed to be renamed ‘Definition of Capital’. 

Responses and next steps

This consultation closed on Monday 9 December 2019. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to

The proposals set out in this CP have been designed in the context of the current UK and EU regulatory framework. The PRA has assessed that the proposals will not be affected in the event that the UK leaves the EU with no implementation period in place. In case of an implementation period, the PRA may need to amend the definition of CRR for the purposes of Chapter 7 of the Definition of Capital Part to explicitly include relevant amendments via CRR II.


The proposed implementation date for the proposals in this CP is Wednesday 1 April 2020. 

PDFConsultation Paper 20/19

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