HM Treasury Finalizes Statutory Instrument to Amend CRR in UK
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

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
FCA Moves Firms to New Data Collection PlatformRelated Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.