UK Prudential Regulatory Authority publishes near-final implementation of Basel standards

PS17/21 – Implementation of Basel standards

Overview

This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 5/21 ‘Implementation of Basel standards’ (page 2 of 2). It also contains near-final rule instruments, Statements of Policy (SoP), Supervisory Statements (SS), and reporting templates and instructions (see list of appendices below).

This PS is relevant to UK banks, building societies, and PRA-designated investment firms, as well as UK financial holding companies and UK mixed financial holding companies of certain PRA-authorised firms.

Summary of responses

The PRA received 20 written responses to CP5/21, in addition to comments received in a number of meetings with interested stakeholders. Respondents generally welcomed the PRA’s proposals to implement the remaining parts of the Basel III standards. However, respondents also sought additional clarification on the PRA’s general approach, provided general comments on the proposals, and raised concerns over the nature and impact of certain proposals, as discussed in the PS. Most responses focused in particular on the PRA’s proposals on the definition of capital, the NSFR, and SA-CCR.

Implementation

The policy material in this PS is published as near-final. The PRA does not intend to change the policy or make significant alterations to the text of the instruments before the making of the final policy material.

The PRA expects to publish the final rule instruments in a subsequent PS, after HM Treasury has laid the Statutory Instrument (SI), to delete the relevant parts of the CRR that these near-final rules will replace.

This policy is intended to take effect at the same time as HM Treasury’s revocation of the relevant parts of the CRR, which will be on Saturday 1 January 2022.

Aspects of the near-final rules are linked to existing publications, such as Discussion Paper (DP) DP1/21 ‘A strong and simple prudential framework for non-systemic banks and building societies’, the leverage ratio, and forthcoming PRA consultations, such as Basel 3.1. For further information on these aspects, please refer to the Regulatory Initiatives Grid.

Policy Statement 17/21

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