HM Treasury Consults on Approach to Transposition of CRD 5
HM Treasury launched a consultation on the approach of UK to transposition of the Capital Requirements Directive 5 (CRD 5) before the end of the transition period of the withdrawal of UK from EU. As per the consultation paper, comment period on the proposed approach closes on August 19, 2020. CRD 5, which entered into force on June 27, 2019, amends the original 2013 CRD 4 provisions, to update the regulatory framework of EU for capital and liquidity requirements. HM Treasury's implementation of CRD 4 delegated significant responsibility to PRA. Therefore, HM Treasury only intends to legislate via secondary legislation to update the implementation of CRD 4 in UK—to reflect the amendments to CRD 4 that have been made by CRD 5. This includes providing PRA with new or updated powers to implement CRD 5 and to ensure that PRA can update its rulebook as needed.
The government will transpose the EU legislation that applies before the end of 2020 and this includes CRD 5, which must be transposed by December 28, 2020. The consultation only seeks comment on the areas requiring legislation, which include:
- The intention to exempt investment institutions prudentially regulated by FCA from the scope of CRD 5, given the planned introduction of the Investment Firms Prudential Regime by summer 2021
- Various updates to the capital buffers that PRA can require from institutions, to allow the Financial Policy Committee and PRA to maintain their current level of macro-prudential flexibility
- Extension of powers of PRA for consolidated supervision of holding companies and creating a new approval regime for financial holding companies and mixed financial holding companies and granting, to PRA, of an express power to remove members of the management body of institutions and holding companies
- Amendments to the list of entities exempted from CRD 5
Given that PRA is independent of the UK government, with its own statutory objectives, the areas of CRD 5 that are to be implemented in PRA rules will not be included in this consultation. The government does not intend to legislate to prescribe changes to the framework for gender-neutral remuneration policies. As the legislation will form a part of the “retained EU law” at the end of the transition period, the government will also need to exercise powers under section 8 of the European Union (Withdrawal) Act 2018, prior to the end of the transition period, to correct any deficiencies arising in this retained EU law to ensure that UK maintains a functioning regulatory and legal framework following the end of the transition period.
Related Links
Comment Due Date: August 19, 2020
Keywords: Europe, UK, Banking, Basel, Brexit Transition, CRD, IFPR, Macro-Prudential Policy, Transposition of CRD5, PRA, HM Treasury
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
FSC Korea Announces Plans to Promote Use of Big Data in FinanceRelated Articles
EBA Publishes Final Regulatory Standards on STS Securitizations
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
ECB Further Reviews Costs and Benefits Associated with IReF
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
EBA Publishes Funding Plans Report, Receives EMAS Certification
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
IOSCO Welcomes Work on Sustainability-Related Corporate Reporting
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
BoE Allows One-Day Delay in Statistical Data Submissions by Banks
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
ACPR Amends Reporting Module Timelines Under EBA Framework 3.2
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
APRA to Modernize Prudential Architecture, Reduces Liquidity Facility
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
