PRA Issues Direction on Capital Buffers, Finalizes PS1/21 on SM&CR
PRA published a direction for modification by consent of 5.1 to 5.3 and 5.5 of the Capital Buffers Part of the PRA Rulebook. The modifications apply where a Pillar 2A requirement, a global systemically important institution (G-SII) buffer, or other systemically important institution (O-SII) buffer has been imposed on a firm on an individual or a consolidated basis. The modifications should be read and used in conjunction with the voluntary requirement on capital buffers and Pillar 2A model requirements, which became effective on December 31, 2020. In addition, PRA published the policy statement PS1/21 on strengthening accountability via the Senior Managers & Certification Regime (SM&CR) forms updates. PS1/21 contains the amended Notifications Part of the PRA Rulebook (Appendix 1), the updated Notification Form (Appendix 2), and the SM&CR Form L (Appendix 3). The final rules and the updated versions of the forms became applicable from January 22, 2021.
PS1/21 also provides feedback to responses to the proposed amendments (CP7/20) to the Notifications Part of the PRA Rulebook, Notifications Form, and SM&CR Form L. In CP7/20, PRA proposed to update SM&CR Form L to reinstate question 3.05, which requests firms making a notification to provide details of any disciplinary action taken. PRA also proposed to amend the Notification Form to reflect the new FCA address, following a move to new premises and the new FCA logo. In addition, PRA proposed to make minor consequential amendments to the Notification Form. These were deleting an incorrect reference to PRA as a limited company, updating references to the PRA Rulebook, and updating the General Data Protection Regulation notification. PRA received no responses to the consultation and, therefore, published the final policy as proposed.
Related Links
- PS1/21
- Notification on Direction for Modification by Consent
- Direction for Modification by Consent (PDF)
Effective Date: January 22, 2021
Keywords: Europe, UK, Banking, Insurance, PRA Rulebook, SM&CR, Regulatory Capital, Capital Buffer, Pillar 2, Basel, PS1/21
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.

Paul McCarney
Insurance product strategist; insurance domain expert; extensive experience developing risk assessment frameworks for insurers
Previous Article
ECB President Answers Queries on Application of EU TaxonomyRelated Articles
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
MFSA Sets Out Supervisory Priorities, Issues Reporting Updates
The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023
German Regulators Issue Multiple Reporting Updates for Banks
Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.