On 17 April 2025, the Prudential Regulation Authority (PRA) published an update on a modification by consent of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook in relation to third country covered bonds.
The PRA had previously, on 8 April 2025, offered a modification by consent that would allow certain third country covered bonds under Article 11(1)(d) of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook to be included in Level 2A High Quality Liquid Assets (HQLA), subject to a cap on the amount recognised.
It has since received several technical comments and requests for clarification, and has consequently decided to pause the process and withdraw the modification so that it can consider and appropriately address the points raised. The PRA plans to clarify its approach once that process is complete.
In the meantime, the PRA explains that firms do not need to amend their approach to recognising third country covered bonds under the Liquidity Coverage Ratio (CRR) and Liquidity (CRR) Parts of the PRA Rulebook.