Featured Product

    PRA Updates Final Policy and Reporting Form for Leverage Ratio in UK

    November 14, 2018

    PRA published the Policy Statement PS28/18, which provides feedback to responses to the consultation paper CP14/18 titled "UK leverage ratio: Applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer." This recently published update also results in changes to the reporting template FSA083 for the UK leverage ratio. PS28/18 is relevant to the firms in scope of the UK leverage ratio framework that are also systemic risk buffer (SRB) institutions, or part of a group containing an SRB institution. The changes to the rules and expectations, along with the new versions of the FSA083 template and accompanying instructions, will take effect from January 01, 2019.

    PRA received one response to the consultation paper, which requested clarification on the scope and timing of the proposals. PRA’s feedback to this response is set out in Chapter 2 of PS28/18. PRA has made no changes to the proposals in CP14/18. In CP14/18, PRA proposed to apply the UK leverage ratio framework on a sub-consolidated basis to ring-fenced bodies in scope; amend the additional leverage ratio buffer (ALRB) to reflect the systemic risk buffer; and, where applicable, expect firms to hold capital on a group consolidated basis to address the ring-fenced bodies group risk (the Leverage Ratio Group Add-On). PS28/18 contains the final policy of PRA to update:

    • The Leverage Ratio, Public Disclosure, Reporting Leverage Ratio, and Ring-fenced Bodies Parts of the PRA Rulebook (Appendix 1)
    • SS45/15 on the UK leverage ratio framework (Appendix 2)
    • SS46/15, which contains instructions for completing data items FSA083 with respect to the UK leverage ratio (Appendix 3)
    • The Leverage Ratio Reporting template FSA083 and the associated reporting instructions (Appendix 4).

    PRA also published the "Additional Leverage Ratio Buffer Model Requirements," which replaces the previous "Additional Leverage Ratio Buffer Model Requirements for G-SIIs" from January 01, 2019. As stated in the updated SS45/15, global systemically important institutions (G-SIIs) and firms subject to a systemic risk buffer, 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 systemic risk buffer, 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 PRA immediately and prepare a capital plan and submit it to PRA. PRA will soon be sending VREQ application forms to UK G-SIIs and UK institutions subject to a systemic risk buffer, which these firms are expected to sign and return. These firms should read their application form in conjunction with the requirements set out in the PRA policy document titled "Additional Leverage Ratio Buffers Model Requirements."

     

    Related Links 

    Effective Date: January 01, 2019

    Keywords: Europe, UK, Banking, Basel III, Reporting, Leverage Ratio, FSA083, Systemic Risk Buffer, Systemic Risk, Ring Fencing, PS28/18, PRA

    Featured Experts
    Related Articles
    News

    SEC Finalizes Capital and Margin Requirements for Security-Based Swaps

    SEC adopted a package of rules and rule amendments to establish capital, margin, and segregation requirements for security-based swaps, under Title VII of the Dodd-Frank Act.

    August 22, 2019 WebPage Regulatory News
    News

    ECB Revises Prudential Provisioning Expectations for New NPEs

    ECB is revising its supervisory expectations for prudential provisioning of new non-performing exposures (NPEs) specified in the “Addendum to the ECB Guidance to banks on non-performing loans” (Addendum)

    August 22, 2019 WebPage Regulatory News
    News

    CFTC Proposes to Revise Information Collection on Margin Requirements

    CFTC is requesting comments on the burdens associated with certain aspects of the Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants (final rule).

    August 21, 2019 WebPage Regulatory News
    News

    FASB to Delay Effective Date for Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant all insurance companies that issue long-duration contracts, such as life insurance and annuities, additional time to apply the standard that addresses this area of financial reporting.

    August 21, 2019 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.9

    EBA published phase 2 of its technical package on the reporting framework 2.9, which includes validation rules, Data Point Model (DPM) data dictionary, and XBRL taxonomies.

    August 21, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Its Consultation Related to SME Financing

    FSB published responses received to the consultation on a report on the evaluation of the effects of financial regulatory reforms on small and medium-sized enterprise (SME) financing.

    August 21, 2019 WebPage Regulatory News
    News

    APRA Revises Related Entities Standard for Banks

    APRA published a strengthened prudential standard APS 222 on associations with related entities, with the aim to mitigate contagion risk within banking groups.

    August 20, 2019 WebPage Regulatory News
    News

    EBA and ESMA Issue Joint Response to EC Letter on Crypto-Assets

    EBA and ESMA issued a joint response to the EC letter, from July 19, 2019, on crypto-assets.

    August 20, 2019 WebPage Regulatory News
    News

    FSB on Responses to Consultation on Wind-Down of Trading Portfolios

    FSB published responses received to the consultation on the solvent wind-down of the derivatives and trading book portfolio of a global systemically important bank (G-SIB).

    August 19, 2019 WebPage Regulatory News
    News

    FSB Publishes Responses to Consultation on Resolvability Disclosures

    FSB published responses received to the consultation on disclosures for resolution planning and resolvability of banks.

    August 19, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3681