The UK approach to implementing CRD V will occur through The Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020, and through amendments to PRA rules and expectations.
On Friday 31 July 2020, the Prudential Regulation Authority (PRA) published Consultation Paper (CP) 12/20 ’Capital Requirements Directive V (CRD V)’. On Tuesday 20 October 2020, the PRA published CP17/20 ‘Capital Requirements Directive V (CRD V): Further implementation’. These CPs set out proposed changes to the PRA’s rules, Supervisory Statements, and Statements of Policy to implement elements of CRD V.
The consultations closed on Wednesday 30 September and Tuesday 17 November 2020 respectively. The PRA is considering the responses, and whether amendments to its proposed approach are warranted in light of the responses received. By mid-December, the PRA intends to publish a Policy Statement that will summarise the consultation responses and explain the PRA’s policy approach, including any further supervisory processes required for implementation. It will include the PRA’s approach to revisions to the definition of capital for Pillar 2A on which the PRA consulted in CP17/20.
CRD V will come into effect on Monday 28 December. Most of its requirements apply from Tuesday 29 December 2020, including those relating to Pillar 2A.