Featured Product

    HM Treasury Finalizes Statutory Instrument to Amend CRR in UK

    May 21, 2021

    HM Treasury published the final statutory instrument on the Capital Requirements Regulation (Amendment) (EU Exit) Regulations 2021, which shall come into force on June 01, 2021. The Regulations are made in line with exercising of the powers in Section 8 of the European Union (Withdrawal) Act 2018. These Regulations will ensure that the onshored Capital Requirements Regulation (CRR) continues to operate effectively for UK investment firms until the introduction of the Investment Firms Prudential Regime. To achieve that, these Regulations extend the dates of the provision exempting UK commodities dealers from specific prudential requirements until the Investment Firms Prudential Regime applies to them on January 01, 2022.

    Capital Requirements Regulation (Amendment) (EU Exit) Regulations 2021 amend Articles 493(1) and 498 of CRR, which provide for an exemption for commodities dealers from specific prudential requirements. These exemptions relieve commodities dealers of the following obligations:

    • To hold regulatory capital equal to at least 8% of total risk exposures
    • To calculate and report exposures to any individual counterparty equal to or greater than 10% of a firm’s eligible capital
    • A prohibition from incurring exposures of more than 25% of eligible capital or EUR 150 million, whichever is higher, to a counterparty or group of counterparties

    EU amended the exemption provisions of CRR for commodities dealers to align with the planned introduction of the EU Investment Firms Regulation on June 26, 2021. Consequently, EU commodities dealers are not required to comply with the provisions of the CRR before the Investment Firms Regulation applies to them. Because of UK onshoring CRR, these EU amendments apply in the UK law. However, the UK’s equivalent regime for investment firms and commodities dealers—the Investment Firms Prudential Regime—will not be introduced until January 01, 2022. Without amendment, Articles 493 and 498 of the CRR will require UK commodities dealers to comply with the prudential requirements of CRR between June 26 and December 31, 2021. They would then need to comply with a different prudential regime, the Investment Firms Prudential Regime, from January 01, 2022. Such a development would amount to a significant regulatory burden for these firms. Therefore, HM Treasury considers that retained EU law does not operate effectively in the UK in this instance and is extending the expiration date for CRR exemptions for UK commodities dealers to align with the introduction of the Investment Firms Prudential Regime in UK. A full impact assessment has not been conducted for this statutory instrument as no, or no significant, impact on the private, voluntary, or public sector is foreseen. 

     

    Related Links

    Effective Date: June 01, 2021

    Keywords: Europe, UK, EU, Banking, Securities, Investment Firms, CRR, Basel, Statutory Instrument, IFPR, Regulatory Capital, HM Treasury 

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582